Fashion brand Next sees sales jump on back of hotter weather and higher pay

Next, which operates around 500 stores, said trading has been “materially better” than the sales guidance it gave shareholders last month.

Full-price sales have been up 9.3 per cent over the past seven weeks, compared with guidance predicting a 5 per cent decline.

The company said it has therefore surpassed its predicted full-price sales by around £93m.

As a result, Next said it has upgraded its sales guidance for the year by £137m and increased its full-year profit expectations by £40m to £835m.

The retailer told shareholders the sharp improvement was partly driven by the weather.

“The onset of warmer weather has made a significant difference to our performance, particularly coming after a wet and cold April,” it said in a statement.

It added that it believes annual pay rises helped trading, after many people received their annual bonuses in April while there was also an increase in the national living wage.

The retailer added: “If recent pay rises and the sudden change in weather have indeed contributed to the current over-performance, then it is reasonable to expect that the effect will diminish over time because ongoing inflation will slowly erode the positive effect of annual pay increases.

“This is why we are not anticipating the current performance to continue at the same level going forward, albeit we have moderately improved our guidance for the rest of the year.”

Analysts Ben Hunt and Kate Calvert at Investec said: “Clearly top-line momentum is looking strong at Next and we would highlight today’s trading update is positive for all clothing retailers, particularly ABF, Boohoo, Asos, Marks and Spencer and JD Sports.

“Indeed, better sales momentum may alleviate some fears for an anticipated promotional market, given the late start to the summer.

“However, we still have some ongoing concerns that the online business is beginning to lose momentum.”

Richard Hunter, Head of Markets at interactive investor, commented “Much as Next underwhelmed the market with its first quarter trading update in May, it has pleasantly surprised investors with a further unscheduled release which notes that trading in the last seven weeks has been materially better than previously anticipated.

In a statement, Mr Hunter added: “The more recent bounce has partly followed optimism over the group’s refreshed strategy as announced at its full-year results in March, although it is unlikely that any upgrades to the general view will be forthcoming until the company reports its half-year numbers in August.

"In the meantime, the market consensus of the shares as a strong hold should remain in place for now, until such time as the seemingly improving momentum can be proved to have held firm.”