Next has raised its full-year profit forecast for the fourth time in six months, despite warm weather putting off shoppers.
The retailer said it now expects a profit of £885 million for the year to the end of January.
This is £10 million more than outlined in September and a far cry from the subdued year expected in early 2023.
The profit rise came after sales rose 4 percent year-on-year in the three months to the end of October – double the expected growth rate.
A particular bright spot was online shopping: an increase of 6.5 percent compared to last year, while store turnover fell by 0.6 percent.
Resilient: Next has raised its full-year profit forecast for the fourth time in six months and now expects profits of £885 million for the year to the end of January
Next blamed this crisis largely on the unusually warm weather in Britain, which put consumers off buying sweaters and jeans for the winter.
The FTSE 100 group said: ‘We believe the volatility in sales performance is the result of changing weather conditions and not underlying changes in the consumer economy.
‘In an autumn season, cooler weather is good for turnover, warmer than average weather depresses turnover.’
But now that Next is able to perform under such adverse conditions, shares rose 3.6 percent, or 248p, to 7132p.
Others haven’t done so well.
The troubled online fashion group Asos warned yesterday of a sharp decline in profits and increasing losses.
And rival H&M said last month that sales had fallen in the September sunshine.
Profit increase: Boss Simon Wolfson said Next’s appeal has increased
Recent figures from the Office for National Statistics also showed that retail sales fell sharply in September.
Richard Hunter, head of markets at Interactive Investor, said: ‘Even within a short trading statement, Next was able to make clear that it is raising its earnings estimate for the fourth time this year.
“The shares are certainly doing well given their recent ability to confound expectations.
Next has long been regarded as a well-oiled machine with a determination to make progress, and a recent upgrade in market consensus to a cautious buy reflects the rising valuation of the prospects.”
Next has approximately 460 stores in the UK and Ireland and an online presence in more than 70 countries.
Unlike digital-only competitors such as Asos and Boohoo, Next has been able to make money from people returning to stores.
Often regarded as a bellwether for the health of the British High Street, Next has also been aggressive with its growth, buying up beleaguered rivals such as Joules and Cath Kidston in recent years.
It recently acquired clothing brand Fatface, along with its 180 UK stores, in a deal worth more than £100 million.
It has also bought stakes in other retailers, such as JoJo Maman Bebe and Reiss, to expand its online business.
These companies pay Next for its online logistics and activities.
Next CEO Simon Wolfson has said that adding more items from different brands will help broaden the appeal to different shoppers – a strategy that companies such as M&S have also adopted.
John Stevenson, analyst at Peel Hunt, said: ‘While the quarter says more about weather patterns than consumers, Next’s relevance and offering remain relevant.’
