Next shares drop despite sales surge as Britons flock to shop for summer clothes in heatwave

Shoppers purchased seasonal clothes earlier than usual this year

The Central Line in the heatwave: How hot is it?

Surging demand for summer clothing helped retail chain Next grow sales by 2.8 per cent as Britons sweltered in the recent heatwave.

The group said online sales in its second quarter to 28 July rose by 12.5 per cent, which offset an ongoing decline in its high street stores, where sales dropped by 5.9 per cent.

Next credited the “prolonged” hot weather through June and July for the better-than-expected sales boost, but kept its guidance for the full-year as it said shoppers had brought forward their spending on lightweight summer clothing from August.

The group had already increased its annual profit outlook in May after early summer warm weather had lifted sales.

In its latest update, Next said: “We believe that this over-achievement in sales was due to the prolonged period of exceptionally warm weather, which greatly assisted the sales of summer weight product.

“It is almost certain that some of these sales have been pulled forward from August, so we are maintaining our sales and profit guidance for the year to January 2019.”

Next said full-price sales rose 4.5 per cent overall in the half-year, with a 5.3 per cent fall in stores and 15.5 per cent growth online.

Full-price sales leapt nearly a quarter higher in one week last month, but trading was volatile throughout the quarter, according to Next.

It launched its end-of-season discount sale a week earlier than in 2017, with 20 per cent less stock after tight management in the first half.

Clearance rates were better than expected and added around £4m to profit, although the group said this was largely offset by higher warehouse and distribution costs.

Including discounted and full-price sales, Next posted overall sales growth of 3.9 per cent for the first half.

Next is pencilling in full-year profits of £717m, down 1.3 per cent on the previous year.

It expects full-price sales to rise 2.2 per cent over 2018-19.

Shares in the group were down almost 6 per cent in early trading.

PA

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