Next put its rival Marks & Spencer in the shade yesterday as its chief executive Simon Wolfson delivered yet another hike in profit forecasts for the FTSE 100 fashion giant.
While M&S struggles with poor sales, the sudden loss of its finance director and increased grumbles over the leadership of Marc Bolland, Next has been making hay while the sun shines, lifting its profit forecasts by £25m to between £775m and £815m.
Next’s shares, up 170p to 6,690p on the back of the upgrade, have added 26 per cent since the beginning of 2014, compared with a miserly 1.2 per cent advance for M&S.
It has also handed back £328m to investors through special dividends and buybacks this year. “This summer has been quite a good summer for clothing retail in that it has been warm. The weather has been on our side for the last four or five months,” Lord Wolfson said.
Group sales are ahead of Next’s April guidance of between 5.5 per cent and 9.5 per cent. Next has been flattered by trading comparisons with last year’s much colder weather and Lord Wolfson expects the going to get tougher.
Despite the economy picking up, Lord Wolfson is cautious over the financial health of British shoppers. He said: “The consumer is OK but we aren’t in a boom. While people have stopped feeling poorer after five or six years, I’m not sure people are feeling a lot richer.”
Next’s second-quarter sales were up 10.7 per cent, including an 18.8 per cent increase in sales from the directory business and a 6.4 per cent increase in high street takings.