Next in line for retail results

Fashion retailer Next is expected to see a rise in half-year profits this week after enjoying spells of warm weather over the summer months

The group said full-price sales for the six months to July 25 were up 3.5 per cent, picking up from first-quarter growth of 3.2 per cent.

It added that the half-year figure just beat the top end of the firm’s guidance for growth of three per cent.

Brokers at Numis expect the firm to turn in pre-tax profits up 5.8 per cent to £343 million for the period when it reports on Thursday, benefitting from sunshine in June and July.

The retailer said in an update last month that of its 3.5 per cent sales improvement, 1.7 per cent came from the opening of “profitable new space’’.

It said that store sales rose 0.8 per cent in the period, while its Next Directory catalogue and online sales lifted 7.5 per cent.

Next also said that stock at its end-of-season sale was 4.8 per cent higher than a year ago, adding that although clearance rates were lower than 12 months ago they were in line with internal forecasts.

The retailer commented that its weekly sales figures throughout the period, demonstrated “the continued volatility of consumer demand”.

It hiked its mid-point profit forecast for the full year from £810m to £825m, an increase of 5.5 per cent on the prior year.

It also lifted its predictions for sales growth for the year to a range from 3.5 per cent to six per cent.

Next said the increase in the sales target was a result of what had been achieved in the first half of the year with no change to the forecast for the remaining six months.

Analysts at Santander said they expected “another solid update” from Next due to strong trading at the end of the first and second quarters, and against some tough comparatives the year before.