Next has raised its annual profit forecast for the third time this year, after second-quarter sales smashed expectations.
The fashion and homeware giant said full-price sales rose 9.2 per cent in the 13 weeks to 1 August, more than double its forecast of four per cent.
Sales came in £70m ahead of expectations, comprising a £19m beat in the UK and £51m from overseas markets.
Next attributed the performance to UK temperatures matching last year’s exceptionally warm summer, alongside pent-up demand in the Middle East and Northern Europe following a weaker first quarter. The retailer also said it had been able to spend more than expected on profitable marketing activity.
The retailer has increased its full-year pre-tax profit guidance by £25m to £1.24bn, which would represent a 7.3 per cent rise against last year.
Around £15m of the upgrade came from the additional sales, while stronger-than-expected returns from its equity investments contributed a further £10m.
Next’s international online business was the standout performer during the quarter, with sales soaring 36.9 per cent.
UK sales increased by a more modest 2.8 per cent, as online growth of five per cent offset a 0.3 per cent decline across its store estate.
Its Label platform, which sells third-party fashion and lifestyle brands through the Next website, recorded a 13.2 per cent rise in sales. However, online sales of Next-branded products in the UK slipped 1.2 per cent.
Next now expects full-price sales to reach £6bn for the year, up 6.3 per cent, while total group sales are forecast to climb 6.6 per cent to £7.5bn.
Despite the bumper second quarter, the retailer maintained its forecast for full-price sales growth of five per cent across the remainder of the year.
International growth is expected to slow to 14 per cent during the second half as Next comes up against tougher comparatives following improvements to stock availability across its European aggregator business last August. UK sales are forecast to rise 2.8 per cent over the same period.
Next is due to publish its half-year results on 17 September
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