Festive cheer as Next hikes profit targets

NEXT has increased its full-year profit forecast after reporting an unexpected boost in sales.

The fashion retailer’s like-for-like sales grew by 3.2 per cent in the 22 weeks to Christmas Eve.

It has now raised its full-year profit forecast to between £490m and £500m – above its previous estimate of £472m.

In a statement Next said that its post-Christmas sale had “gone well” and that home furnishings had performed “particularly well”.

Excluding online sales, like-for-like sales across more than 500 Next stores were up 1.6 per cent during the 22-week period. It said the consumer environment was “more stable than expected, with only modest falls in employment, low inflation and continuing low interest rates”.

The firm’s mail order business, Next Directory, saw sales increase by 6.8 per cent compared with a year ago.

But Next warned that challenges ahead could include tax rises, government spending cuts and rising interest rates.

The statement added: “We do not necessarily expect the year ahead to be as good as the previous six months. We believe Next is well placed to face the challenges of the year ahead.”

Next, led by chief executive Simon Wolfson, entered the sale period with 12 per cent less stock than last year – a move aimed at preserving margins.

Shares in Next have risen by 93 per cent over the past year but closed two per cent lower at 2,100p last night.

The retailer is planning for lower sales growth at its outlets of between one per cent and minus three per cent this year.

However, it expects its Directory online and telephone business to show sales growth of up to two per cent going forward.