FASHION retailer Next upgraded profit forecasts as warm weather and the royal wedding bank holiday boosted spending.
The high street giant, which has suffered from mediocre sales since a dismal Christmas season, said consumers bringing forward summer purchases helped lift total sales by 5.2% in the 13 weeks to April 30.
However, Next, which has stores at Kingsgate and the Great Northern Retail Park in Huddersfield, said it did not expect current levels of growth to continue into the second quarter – and remained cautious about consumer spending.
The company, which has 500 stores in UK and Ireland, said it now expected pre-tax profits for the full year to be between £535m and £585m – about £15m higher than the guidance given in March and above market expectations.
Retailers have been hit by a slowdown in consumer spending this year, as the VAT hike from 17.5% to 20% and soaring prices squeeze household incomes.
In the company’s last update in March, Next chief executive Simon Wolfson warned: “Things are likely to get worse before they get better.”
But the picture has improved for the retailer as online sales soared by 14.8% and retail increased by 0.9%, all excluding VAT.
The company said sales were driven by better ranges and improved stock availability, particularly in womenswear.
Online outlet Next Directory benefited from more aggressive marketing and improved delivery services, the company added.
Next now expects combined retail and online sales to be 1% to 4% up for the full year.
But the company stressed: “The combined effects of the public sector deficit cuts and continued inflation in essential commodities are all likely to restrain growth in consumer spending generally.”
Next said it continued to expect price increases to be marginally higher in the second half than in the first six months at about 8%.
Next shares closed 4% or 97p higher at 319p following the update.