Next beats retail gloom with profits upgrade

Next has raised its profit forecasts for the second time in two months and increased first-half profits as it bucked the downbeat trend on the high street.
The FTSE 100 clothing and homewares chain, seen as a bellwether for the wider British high street, reported a 7.1 per cent rise in pre-tax profits of £452 million for the six months to July 27 and said it was on course to make annual profits of almost £1 billion.
Sales rose to £2.95 billion in the first half of the year, up 8 per cent from £2.73 billion during the same period last year.
Next joins the fashion retailer White Stuff in defying a more generally downbeat high street trend as people continue to watch their spending. A cold spring and wet summer months have weighed on many retailers, with Next’s competitors John Lewis, Primark and Inditex, Zara’s parent company, all highlighting the impact of the weather on consumer spending.
The FTSE 100 retailer has defied the odds despite the cost of living crisis and higher inflation and raised its profit guidance several times over the past year. Its chief executive, Lord Wolfson of Aspley Guise, 56, has a reputation for under-promising and over-delivering.
Next shares, which have risen more than 25 per cent since the beginning of the year, rose 362p, or 3.5 per cent, to £106.97 in early trading.
Total group sales for the full financial year are expected to be 6.6 per cent higher than the previously forecast. The retailer also raised its pre-tax profit expectations by £15 million to £995 million.
It reported that full-price sales in the first six weeks of the second half of the year had “materially exceeded” expectations as they rose 6.9 per cent. Next also posted strong results from its overseas markets with full-price sales in the period climbing by 22.8 per cent to £433 million.
Next is a multinational retailer with headquarters near Leicester and 458 shops across the UK. Its ecommerce hub, Total Platform, provides services that help third-party retailers to sell goods online.
The company, which has bought stakes in brands including Joules, Reiss and FatFace, said it would bring out a new site known as Seasons for customers looking for its premium brands that are not available on its main Next website.