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Next raises profit expectations after warm weather helps sales Next raises profit expectations after warm weather helps sales
(35 minutes later)
Next has increased its profit expectations for the year by 2% after warm weather helped to increase sales.Next has increased its profit expectations for the year by 2% after warm weather helped to increase sales.
Shares in the clothing and homewares retailer rose 2% to £76,55, close to a five-year high, as it said total sales were up by 3.3% in the half-year to 25 July. Previously, Next’s chief executive, Simon Wolfson, had predicted sales would increase by between 0% and 3%. Shares in the clothing and homewares retailer rose 2% to £76.55, close to a five-year high, as it said total sales were up by 3.3% in the half-year to 25 July. Previously, Next’s chief executive, Simon Wolfson, had predicted sales would increase by between 0% and 3%.
“We believe the improvements experienced at the end of the season were mainly driven by warmer weather,” Next said.“We believe the improvements experienced at the end of the season were mainly driven by warmer weather,” Next said.
Full-year profits are now expected to be about £825m, up from £810m last year, after the sunny end to June and the start to July encouraged shoppers to buy summer clothes after a chilly May.Full-year profits are now expected to be about £825m, up from £810m last year, after the sunny end to June and the start to July encouraged shoppers to buy summer clothes after a chilly May.
The stronger than expected performance was underpinned by a 7.5% rise in full-price sales online and via the Next Directory catalogue. The retailer tends to outperform its rivals during sudden bursts of seasonal weather because shoppers turn to the Directory’s quick and reliable delivery or its click and collect services.The stronger than expected performance was underpinned by a 7.5% rise in full-price sales online and via the Next Directory catalogue. The retailer tends to outperform its rivals during sudden bursts of seasonal weather because shoppers turn to the Directory’s quick and reliable delivery or its click and collect services.
The same phenomena helped Next enjoy a strong start to the spring season before temperatures dropped in May.The same phenomena helped Next enjoy a strong start to the spring season before temperatures dropped in May.
The retailers’ fortunes can be closely linked to the weather as shoppers decide when to revamp their wardrobes. Next was forced to issue a profit warning in October when unseasonably warm weather depressed sales of winter coats and knitwear for retailers across the sector.The retailers’ fortunes can be closely linked to the weather as shoppers decide when to revamp their wardrobes. Next was forced to issue a profit warning in October when unseasonably warm weather depressed sales of winter coats and knitwear for retailers across the sector.