Next is bouncing back from its worst year in 25 years after an improvement in spring weather boosted first-quarter sales, prompting the fashion retailer to upgrade its full-year profit forecast.
The high street giant now expects a full-year pretax profit of £717 million, compared to the previous guidance of £705 million pounds.
Next also expects a sales increase of 2.2 per cent for its fiscal year to January 2019.
The retailer had been the UK’s most successful fashion chain this century in terms of profits but over the last two years it has faltered due to plummeting consumer spending, which has moved towards holidays and entertainment.
However, in its trading update for the first quarter period ending May 7, sales were around £40 million ahead of the company’s internal forecast, thanks to warm weather in recent weeks which followed a previous cold spell.
Full price sales were up six per cent for the same period, comprised of an 18.1 per cent surge in its online business against a 4.8 per cent decline in Next’s bricks-and-mortar retail operations.
Although Next shares have increased 17 per cent so far this year, they are still trading well below levels of two years ago.
The upbeat quarterly update comes after Next recorded a drop in full-year profits and a slight dip in total sales after what was described as “the most challenging year” the retailer had endured in 25 years.
For its fiscal year ending January 28, Next’s operating profit dropped 8.2 per cent and profit before tax came in at £726.1 million, an 8.1 per cent dip on the previous year’s £790.2 billion.
Next’s quarterly update also comes as UK retail grapples with one of its most difficult years so far, with downbeat company updates, household retailers Toys R Us UK, Maplin, Carpetright and New Look all plunging into administration, and House of Fraser announcing a CVA launch in June.