High street fashion chain NEXT has upgraded its profit targets after shrugging off wet weather at the start of summer.
Sales at the retail chain grew as it was also buoyed by FatFace, which it bought for £115 million last year, and Reiss, in which it now has majority ownership.
NEXT said its finances have been boosted by stronger-than-expected sales, particularly overseas, and increased cost savings.
The retailer said it is now on track for profits of around £980 million for the current financial year, up £20 million on its previous guidance.
It said this includes a roughly £11 million boost from extra sales and £9 million improvement from savings, mainly linked to its logistics.
NEXT said full price sales were 3.2% over the quarter to the end of July, surpassing expectations by £42 million after predicting a slight dip.
In a statement, the company said: “The weather last summer was exceptionally favourable for clothing retailers, so we had planned for full price sales to be down 0.3% in the second quarter this year.
“Our full price sales in the UK (online and retail combined) were only slightly ahead of our expectations, up 0.4%.
“Overseas sales online were much better than expected, and were up 21.9%.”
It added that group sales, which includes subsidiaries, were up 8% after a boost from its takeover of FatFace and increased share of Reiss.
Julie Palmer, Partner at business recovery specialist Begbies Traynor, said: “True to form, NEXT has once again beaten its own expectations to deliver a healthy 3.2% increase in sales, compared to the 0.3% drop the retailer had anticipated.
“While today’s performance has clearly been lifted by the 21.9% rise in overseas sales online, the easing of inflationary pressures coupled with a notable rise in consumer confidence should provide a welcome boost to sales in the UK and encourage customers to fill their baskets again.
“As many retailers have shown, the current climate is not easy to navigate, especially with less pricing power and ever-changing demand. Yet NEXT’s ability to strengthen and adapt both its online and bricks-and-mortar operations has meant it continues to thrive as it heads towards another year of record profit.”
