British fashion retailer Next has raised its full-year profit guidance again after posting better-than-expected full-price sales in the first half of the year.
The high street giant now expects a full-year pre-tax profit of 875 million pounds compared to its previous guidance of 845 million pounds. It would represent a year-on-year increase of 0.5 percent.
The company said it expects to benefit from an exceptional gain of around 110 million pounds as a result of the accounting gain generated by its Reiss transaction.
This is the third time the company has increased its profit outlook in four months.
The raised guidance comes as Next saw its pre-tax profit widen to 420 million pounds from 401 million pounds in the six months to July, while its post-tax profit narrowed to 322 million pounds from 329 million pounds.
H1 sales ahead of expectations
The retailer’s sales in the period increased 5.4 percent to 2.64 billion pounds, while brand full-price sales, which it expected to be down 3 percent, rose 3.2 percent.
Chief executive Lord Wolfson said: “In reality, we were overly cautious about the prospects for sales in the current year, we underestimated the support nominal wage increases, and a robust employment market, would give to our top line.
“We also believe the exceptionally warm weather in late May and June served to significantly boost sales of our summer clothing at a critical time (a factor we need to bear in mind when it comes to our forecast for next year).”
Next now expects full-price sales in the second half to be up 2 percent on the prior year, compared to its previous guidance of up 0.5 percent.
Accordingly, it now expects full-year sales growth of 2.6 percent compared to previous guidance of 1.8 percent.
It noted: “Some might believe this is Next being (typically) over-cautious, given we delivered +3.2 percent in the first half.”