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.
The group said that pre-tax profits rose by seven per cent to £185m for the half year to 31 July from £173.3m in the same period the year before.
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.
Chief executive Simon Wolfson said that the slump on the high street was not as bad as some feared.
He added: “Some assumed that a cataclysm in the financial markets would lead to a similar crisis in consumer markets. But it’s been a recession – not Armageddon.”
The group upgraded its previous profit guidance and said it was likely to deliver profits close to last year’s £429m, up from the £400m it had previously predicted.
But Wolfson refrained from predicting a swift recovery and said it was “realistic” to predict a further drop in like-for-like sales.
Next said that the weak pound had put pressure on its margins, as it buys many of its lines in dollars and euros.
Unlike its competitors, it has held off from widespread discounting, instead relying on its traditional and popular end-of-season sales.