LONDON (Reuters) – Clothing retailer Next reported a 0.5 percent rise in first-half profit and raised its guidance for the full year after better-than-expected trading in August and early September.
The firm, which trades from over 500 stores in the UK and Ireland, about 200 stores in 40 countries overseas and its Directory online business, said on Tuesday it made a pretax profit of 311.1 million pounds in the 26 weeks to July 28 after full price sales rose 4.5 percent.
When Next issued its August trading update it believed there was a high risk that sales gained in July would be offset by losses in August.
“As it turned out, we did not experience any material loss of sales in August or early September,” the firm said.
Next raised its central guidance for 2018-19 pretax profit by 10 million pounds to 727 million pounds – broadly in line with last year’s profit of 726.1 million pounds. That would deliver a growth in earnings per share of 5 percent, reflecting share buybacks.
However, Next cautioned that “the UK retail market remains volatile, subject to powerful structural and cyclical changes.”
It said sales in its stores, which account for just under half of turnover, continue to be challenging.
“We believe the over-performance in the first half was flattered by the unusually warm summer and we remain cautious in our outlook for the rest of the year,” it said.
Next said it is well prepared for Britain to depart from the European Union without a free trade arrangement and managed transition period.
It said this was not its preferred outcome.
(Reporting by James Davey, Editing by Paul Sandle)