Next increases its annual profit outlook as hot weather boosts summer clothing sales

Fashion chain Next has raised its annual profit outlook after seeing full-price sales lift 5% in the past three months as the spell of hot weather boosted summer clothing purchases.

The group’s second-quarter sales performance exceeded expectations by £50 million, and the chain has lifted its full-year profit guidance by £10 million to £860 million.

But the retailer expects the unusually warm weather to subside and the impact of soaring inflation on consumer spending to worsen, dampening sales in the second half of the year.

Charlie Huggins, Head of Equities at Wealth Club, commented: “Next isn’t immune to the cocktail of headwinds facing UK retailers, but it tends to be better at managing them than most. These results are no exception.

Fashion chain Next has raised its annual profit outlook after seeing full-price sales lift 5% in the past three months as the spell of hot weather boosted summer clothing purchases.

"Everything Next does is forensically examined in terms of profit delivered, return on capital and risk. Investments are made with a five to10-year view.

"Next is no longer just a UK fashion retailer selling its own products. It’s broadened out into Homewares and Beauty and is selling more third-party brands through its website than ever before, both in the UK and internationally. This is helping to keep it relevant while opening new avenues for growth.

"Make no mistake – if the consumer catches a cold, Next will feel it. But it’s unlikely investors will lose their shirt, given the resilience of its business model. Meanwhile, the long-term growth prospects for the business are looking better than they have done for quite some time.”