Clothing retailer Next — which has 800 stores in Britain and Ireland — kept its forecast for annual profit after reporting a rise in first-quarter full price sales, slightly ahead of its guidance.
The group reiterated that it expects its sales in the second quarter to be weaker than the first quarter to April 27, because last year it benefited from particularly warm weather from late May to the end of June.
It expects a profit before tax of £960m (€1.12m) in its 2024/25 year, up from £918m (€1bn) in 2023/24. It also kept its forecast for full-price sales to increase 2.5% over the year, guiding to a fall of 0.3% in the second quarter and a rise of 2.5% in the third and fourth quarters.
Shares in Next were little changed in the latest session, but have gained by more than 10% since the start of the year.
First-quarter store sales were flat, while online sales were up 8.8%.
Last month, Next said prospects for Britain’s consumers were the brightest since before the pandemic.
It said positives included wages rising faster than prices and zero inflation in the group’s own products.
Risk factors were a weakening jobs market and consumers having to renegotiate mortgages at higher rates.
Industry data published on showed British clothing and footwear prices fell in April, as retailers offered promotions to encourage consumer spend.
Next has guided its selling prices on like-for-like goods to be down 2% in its first half versus last year, with deflation of 0.5% in the second half. Last week, rival Penneys-Primark raised its profit outlook despite cautioning the consumer environment “remains soft”.