Next warns of volatility on the high street

Shares jumped 5 per cent as the company also lifted its profits forecast for the year amid a stronger-than-expected improvement in perform- ance.

But the company said trading “remained volatile” throughout the latest period.

Sales in the third quarter to October 26 were up 4.3 per cent, just above the top end of an improvement of 1 per cent – 4 per cent expected for the second half.

The figures included a 10.7 per cent increase in the Next Directory catalogue and online division.

Retail stores managed to increase revenues by 0.4 per cent – despite a stock blunder following the summer heatwave that left Next short of warm weather fashions in August.

The rise comes after sales fell 0.9 per cent for the first half-year to the end of July, which included a dip during a period of freezing spring weather.

Next said overall sales were up 3 per cent for the year to date, including 1.9 per cent from new openings.

Weekly sales charts for the latest period showed the most dramatic fluctuations in September, with two weeks seeing takings up more than £10m compared with last year and a fall of nearly £6m in another seven-day period.

Next said it expected to earn between £650m to £680m over the 12-month period, an increase from its previous guidance of £635m to £675m.

Profit before tax coming in at the top end of the new range would represent a 9.4 per cent rise on last year.

The group trades from more than 500 stores in the UK and Ireland and nearly 200 outlets in more than 30 other countries.

Cantor Fitzgerald analyst Freddie George said the latest sales improvement was “a positive surprise given the warm weather”.

The mood elsewhere in the sector is less buoyant, after CBI figures earlier this week indicated that shoppers reined in their spending this month.