Next has raised its profit forecast by £30m after a strong start to the year.
In an early trading update to the market, prompted by better than expected full price trading and improved clearance rates in its Sale, Next said total sales grew 1.4 per cent in the 25 weeks to July 18 with like-for-like sales down 1.9 per cent.
Next said: “As a result of better full price Next Retail sales and improved clearance rates we have added a further £15m to our internal profit forecast for the first half.”
It added that product negotiations and sourcing had gone better than planned which will positively impact its second half gross margin. “As a result we have also added £15m to our internal profit forecast for the second half,” it said.
The good weather has had a positive impact on recent sales and Next estimates that warmer temperatures improved retail sales by between two per cent and three per cent.
In its second half Next estimates that like-for-like sales will be between -3.5 per cent and -6.5 per cent as it will not benefit from favourable weather comparisons as in its first half.
It said that although it does not see much cause to expect a positive change in consumer sentiment in the second half of the year it does not expect it to get worse.
Next also said that growing swine flu infection rates could deter shoppers.