Next is performing ahead of expectations and should deliver a strong second-quarter trading update when it reports at the end of the month, broker Singer Capital Markets believes.
Singer analyst Matthew McEachran said: “Although management expected second-quarter performance to be weaker than quarter one, in part due to tougher comparatives, we believe that improvements to the product range and continued seasonal selling conditions will have driven another decent quarter for Next.”
McEachran expects like-for-like sales for the first half to fall 4.5 per cent. He said Next always plans conservatively but new store refits and better product gives the retailer scope to “widen out to new customers”.
Next’s higher-end Signature range has also been selling strongly, which McEachran said bodes well for gross margins.