Next raises forecasts on robust sales

HIGH street fashion chain Next yesterday lifted its annual profit forecast for the third time in five months after reporting better-than-expected sales growth.<br /><br />The group said that pre-tax profits rose by seven per cent to &pound;185m for the half year to 31 July from &pound;173.3m in the same period the year before.<br /><br />Total sales rose by 0.2 per cent, while a 1.2 per cent drop in like-for-like sales beat forecasts of a four to seven per cent drop.<br /><br />Chief executive Simon Wolfson said that the slump on the high street was not as bad as some feared. <br /><br />He added: &ldquo;Some assumed that a cataclysm in the financial markets would lead to a similar crisis in consumer markets. But it&rsquo;s been a recession &ndash; not Armageddon.&rdquo;<br /><br />The group upgraded its previous profit guidance and said it was likely to deliver profits close to last year&rsquo;s &pound;429m, up from the &pound;400m it had previously predicted.<br /><br />But Wolfson refrained from predicting a swift recovery and said it was &ldquo;realistic&rdquo; to predict a further drop in like-for-like sales. <br /><br />Next said that the weak pound had put pressure on its margins, as it buys many of its lines in dollars and euros. <br /><br />Unlike its competitors, it has held off from widespread discounting, instead relying on its traditional and popular end-of-season sales.<br />