Fashion brand Next has revealed that warmer weather and continued wage increases have sparked a jump in sales in recent weeks.
On Monday, the high street retailer lifted its sales and profit guidance for the year as a result, sparking a jump in the company’s shares.
Next, which operates around 500 stores, said trading has been “materially better” than the sales guidance it gave shareholders last month.
Full-price sales have been up 9.3% over the past seven weeks, compared with guidance predicting a 5% decline.
The company said it has therefore surpassed its predicted full-price sales by around £93 million.
As a result, Next said it has upgraded its sales guidance for the year by £137 million and increased its full-year profit expectations by £40 million to £835 million.
The onset of warmer weather has made a significant difference to our performance— Next
The retailer told shareholders the sharp improvement was partly driven by the weather.
“The onset of warmer weather has made a significant difference to our performance, particularly coming after a wet and cold April,” it said in a statement.
It added that it believes annual pay rises helped trading, after many people received their annual bonuses in April while there was also an increase in the national living wage.
The retailer added: “If recent pay rises and the sudden change in weather have indeed contributed to the current over-performance, then it is reasonable to expect that the effect will diminish over time because ongoing inflation will slowly erode the positive effect of annual pay increases.
“This is why we are not anticipating the current performance to continue at the same level going forward, albeit we have moderately improved our guidance for the rest of the year.”
