Retailer Next lifts outlook as summer sales surge

High street chain Next says sales surged in recent months as hot weather and the release of pent-up demand in the Middle East helped it beat expectations.

The fashion and homeware retailer lifted its profit outlook again as a result of the stronger-than-expected second quarter.

Total full-price sales, which excludes discounts and clearance items, increased by 9.2 per cent over the 13 weeks to August 1, compared with the same period last year.

It comes in above the four per cent increase the retailer was forecasting for the period.

In the UK, sales were up by 2.8 per cent for the quarter, with online shopping driving the increase while stores sales decreased.

Online international sales soared by 37 per cent year-on-year.

Next said the “over-performance” was partly due to weather in the UK being warmer than anticipated, with temperatures in June and July soaring, as well as spending more on profitable marketing campaigns.

It also pointed to the release of pent-up demand in the Middle East and Northern Europe following a weaker start to the year for both regions.

Trading in Next’s overseas business has been affected by the Iran war, which began at the end of February, with the Middle East region accounting for around six per cent of the group’s annual sales.

But chief executive Lord Simon Wolfson previously said it planned to raise prices in some overseas countries by as much as eight per cent to offset the impact.

Next said it was now expecting its full-year pre-tax profit to be £25 million above previous estimates at £1.24 billion, which would be 7.3 per cent higher than the year before.

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