Next rings up better-than-forecast rise in sales

High street giant Next has shrugged off cold and damp spring weather to notch up a better-than-expected rise in first-quarter sales.

The fashion and homewares chain posted a 5.7% increase in full-price sales for the 13 weeks to April 27, ahead of its guidance for 5% growth.

But Next said that, despite the higher-than-forecast sales, it still expects early summer trading to slip after a warm weather boost last year.

It kept its sales growth guidance for the first half at 2.5% and retained its full-year forecasts.

“This implies that our sales in the second quarter will be down 0.3%,” it said.

“We expect the sales performance in the second quarter to be weaker than the first quarter because last year benefited from particularly warm weather from late May through to the end of June.”

The group said it is on track for a 4.6% rise in annual underlying pre-tax profits to £960 million and full-price sales to lift by 2.5%.

It comes after Next reported a 5% increase in underlying pre-tax profits to £918 million for the year to January.

The firm said at the time that it would be cutting prices for customers by 2% thanks to lower buying costs for clothing and goods, with price tags set to fall by another 0.5% in the second half of its 2024-25 financial year.

But it is expected profits and sales growth will ease back in the current year, with the group noting concerns over the jobs market in the year ahead as higher wages put businesses under pressure.

Retail analyst James Grzinic, at Jefferies, said it was a “healthy start to the year” for Next, in spite of the recent cold and damp spring weather.

He said: “The Next of old may have been a greater hostage to the unhelpful weather conditions that have emerged in the UK in recent weeks.”