Shares in the fashion chain Next hit a record high yesterday as the FTSE 100 company cheered the City with raised profit forecasts.
The stock – up 25 per cent so far this year – burst through the £50 mark as improved weather helped it bounce back from the coldest spring for 50 years, while a tight grip on stock meant Next went into the summer sales with 20 per cent less to sell than a year ago, boosting full-price sales.
Profits were £10m above last year as a result in the 26 weeks to 27 July, prompting Next to upgrade profit forecasts to £635m-£675m for the year to January. Next's store, online and Directory sales were up 2.3 per cent.
The chief executive, Lord Wolfson, said shoppers were being "more spontaneous" in their spending habits, although a full-scale consumer recovery remains some way off. The increased impact of short-term events such as the timing of bank holidays and school holidays is making consumer trends harder to read, he added.
"Consumers are spending closer to their point of need – this year has been an extreme continuation of a long-term trend. Retail has become much more accessible than it was 15 or 20 years ago with online and late-night shopping. Consumers don't have to plan as much," Lord Wolfson said.
He refused to get carried away with the economy's growth of 0.6 per cent between April and June. "The funny thing with these growth figures is that they alternate between despondency and joy when the numbers are very small and often revised," he said. "Until we see growth of 1 per cent or more for three or four quarters, we are not going to see any significant change in consumer behaviour."
A breakdown of total week-by-week sales showed how they had dipped alarmingly during the cold weather, falling by around £12m in the week to 6 April. But tills were set ringing again as the thaw set in and the sun came out, with a number of weeks in April, May, June and July showing improvements.
Kate Calvert, an analyst at Cantor Fitzgerald, said: "While sales were in line with expectations, profitability has been better, with less stock going into the sale and lower mark-down costs. While a pretty mature business in terms of the number of stores, Next continues to drive growth by pursuing marginal gains in its offer, service and efficiency, which enhances its already highly profitable multi-channel business."
The shares closed up £1.18 at £50.20.