Next has shrugged off a damp start to the summer with better than expected sales at its high-street stores.
Shares in the company rose more than 8% to £60.76 after it upped annual profit expectations by £10m to £725m as full-price sales rose by 4% in the three months to 27 July. The company had expected a 0.5% fall.
“We weren’t expecting this quarter to be as good as it has been,” said Simon Wolfson, the Next chief executive. “Partly we may have overestimated the benefit we had last year from the good weather.”
Sales in Next stores fell by 4.2%, less than half the rate expected by analysts. Wolfson said the group’s Label business, which sells brands including Ted Baker and Joules online and via a catalogue, had performed well helping drive 12% total growth online. Next now expects full-price sales to rise by 3.6% for the year, just over double the previous estimate.
The good performance comes despite widespread troubles on the high street which have led to a string of retailers, including Debenhams, Topshop and New Look, closing stores and asking landlords for rent cuts.
Sofie Willmott, an analyst at GlobalData, a market analysis firm, said: “Next’s current performance is not an indicator for its mid-market competitors as the retailer continues to outperform.”
She said Next’s click-and-collect services and efforts to reinvent its stores by adding a range of concessions from coffee shops to car dealers had helped attract shoppers.
