Next has done it again - another trading update, another performance ahead of expectations, and another upgrade to profit guidance.

A good rule of thumb in life and business is to under-promise and over-deliver. This has been a forte of Next under the leadership of chief executive Simon Wolfson since August 2001.

Latest sales figures for the six months to July were 5.4% higher than in the same period a year earlier at £2.5 billion, with pre-tax profits up 4.8% at £420 million. The key component within this was a 3.2% increase in full-price sales, a far better performance than the 3% decline that had been anticipated.

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As a result, Next has raised its full-year profit guidance from £845m to £875m.

Not surprisingly, shares in Next are trading more than 3% higher this afternoon but this hot streak of beating market expectations could backfire if investors are spoiled by a steady diet of pleasant surprises, and merely meeting expectations leaves a sour taste in the mouth.

In what was perhaps an attempt to avoid being cast as the boy who cried wolf, Next has said that inflationary pressures on selling prices and operating costs will likely continue to ease in the coming months.

“In reality, we were overly cautious about the prospects for sales in the current year, we underestimated the support nominal wage increases, and a robust employment market, would give to our top line,” the retailer said.

“Sales are better than expected; online service has significantly improved; costs are lower than expected and, although it is early days, and there have been bumps along the road, all three streams of new business are showing signs of promise.”

READ MORE: Next raises profit guidance after stronger-than-expected summer sales

To its credit the organisation has mastered the art of doing the simple things well, with operational execution that allows it to outshine its peers through what has arguably been the most challenging period in the history of UK retailing.

Though less than 35% of group sales are now through its shops, Next has maintained a high street presence by negotiating what are typically shorter and more favourable leases than its peers. Efforts to enhance the product range are generating returns, as are improvements to online services which are both adding to sales and generating cost savings.

Next still expects high levels of inflation to weigh heavy on consumers' wallets in the second half, but the group does appear to be moderating it sombre view of the market.