Retailer Next say sales have been better than expected, with the firm revealing a boost from warm weather.
It revealed pre-tax profits increased 4.8 per cent to £420million over the six months to July, compared to the same period last year.
The FTSE 100 company also saw total sales rise by 5.4 per cent with exceptionally warm weather in late May and June boosting sales of its summer clothing at a critical time, the group said.
Following the results, the high-street chain lifted its profit guidance for the full year for the third time, from £845million to £875million.
The Fashion retailer revealed its pre-tax profit increased by 4.8% to £420m over the six months to July, compared to the same period last year
Richard Hunter, head of markets at Interactive Investor, said: ‘Next has long been regarded as a well-oiled machine and clearly has the determination to drive progress.
‘The combination of lower costs and an online offering which continues to prosper underpins financial performance and augurs well for future development of the offering as a whole.
‘The shares have more recently seen the benefit of increasing expectations, having risen by 24 per cent over the last year, as compared to a gain of 6.8 per cent for the wider FTSE 100.’
Next also said it underestimated the impact that slowly rising wages and a strong employment market would give its sales.
Average wage growth has been outstripped by price hikes in the UK over recent years but caught up with inflation in the three months to July, according to official figures.
Earlier this month, the group revealed that it had joined forces with the Reiss family to acquire a significant stake in the Reiss Group.
The two parties have agreed to spend £128million purchasing a 34 per cent stake in the luxury clothing chain – whose fans include the Duchess of Cambridge – from American private equity giant Warburg Pincus.
Upon the deal’s completion, Next will have increased its stake in Reiss Group from 51 per cent to 72 per cent, while the Reiss family will possess a 22 per cent stake and the remainder held by the Reiss management.
Hunter added: ‘The two-year performance remains negative, however, where the shares remain down by 12 per cent and some way off the peak of £81 achieved in November 2021.
‘Even so, Next has once again shown its credentials for existing and future growth, and the market consensus of the shares as a strong hold could well become subject to some upward revision.’
Next said it expects prices to rise by about 2 per cent over the autumn and winter season, lower than the 3 per cent increase it had previously forecast, before potentially flattening in the spring of next year.
It comes as inflationary pressures continue to ease for the group, with costs such as labour, production and shipping falling faster than expected.
Next shares were up 2.3 per cent to 7,270p in morning trading on Thursday.
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