High street giant Next is booming. Last year it overtook profits at Marks & Spencer for the first time as the ailing clothing division at the British multinational retailer struggles to maintain growth, and this morning it reported that pre-tax profit for the year to January 2016 is predicted to rise between 2.9% and 8%, up from the previous range of 0.4% to 6.7%. Profits would be between £805m and £845m.
The fashion chain said that total sales were up 3.5%, driven by 7.5% growth within its Directory division – which includes the online arm of the business. Next Retail sales were up 0.8% for the 26 weeks to 25 July.
Warmer weather boosted Next’s sales through June and into July, said the UK’s second largest clothing retailer, helping business to recover from some slightly colder weeks in May.
Total stock for the end of season sale was up 4.8% on last year. The fashion giant said clearance rates were lower than the previous year, but still in keeping with expectations.
The company said: “This increase is as a result of the better sales achieved in the first half of the year; we have not made any change to our second half sales forecast. The mid-point of our profit guidance is very close to the current market consensus.”
“Next continues to outperform Marks & Spencer and the rest of the competition,” Bryan Roberts, a Senior Analyst at Kantar Retail, told Bloomberg. “It is patently obvious which company you’d prefer to be a shareholder in at the moment.”