High street bellwether Next welcomed robust sales growth in its latest quarter as revenue beat its own estimates.
The retailer credited “unusually warm weather” over Easter for the 4.5 per cent year-on-year rise to sales of around £10m.
While high street stores saw sales decline 3.6 per cent in the three months to the end of April, much better than analysts’ consensus prediction of minus 6.2 per cent.
Meanwhile online sales soared 11.8 per cent, Next revealed in today’s trading update, shy of an expected 12.8 per cent gain.
"We believe this over performance versus forecast was mainly as a result of unusually warm weather over the Easter holiday period, which was particularly helpful to our retail stores," Next said.
However, Next declined to raise its full-year guidance, saying it was “too early” to revise its predictions for the 12 months to January 2020 based on its latest performance.
“As expected, we experienced strong sales growth during February because sales were adversely affected by extreme winter weather last year,” Next told shareholders.
“March was broadly in line with our forecast for the full year and … sales during April were better than expected.”
That means quarterly expectations remain to see sales fall 0.5 per cent in the second quarter, before rises of 1.7 per cent in the last two quarters of its financial year.
Shares fell by a marginal 0.2 per cent on the figures to 5,756p.
Next expects overall sales growth of 1.7 per cent for 2019-20, with group profit before tax falling 1.1 per cent to £715m.
CMC Markets’ chief analyst, Michael Hewson, pointed to the store sales drop as evidence that retail “remains a difficult market place”.
George Salmon, equity analyst at Hargreaves Lansdown, added Next’s bright sales do not signal an end to the high street’s woes, but are a good omen.
“With the problems at Debenhams still fresh in the memory, it’s too early to say things are looking up in retail generally,” he said. “But Next remains a well-run operation.
“Its leases are typically short and as an early mover in the online space it’s got a head start over rivals like M&S. We think it should be well-placed to roll with the punches should the high street’s malaise continue.”
Unlike other high street stalwarts, the retailer said in January that it has seen no evidence for Brexit hurting sales.
Instead boss Lord Simon Wolfson said: “Our feeling is that there is a level of fatigue around the subject that leaves consumers numb to the daily swings in the political debate.”