Next increases profit guidance for the fourth time in five months

Next has increased its full-year profit guidance for the fourth time in five months despite unusually warm weather hitting demand for its autumn range.

The fashion and homewares retailer now expects annual pre-tax profits to be £10 million higher at £885 million, above the £870.4 million it made in 2022-23.

Next, regarded as a bellwether of the high street, said that full-price sales rose by 4 per cent year-on-year in the three months to the end of October — £23 million ahead of its initial guidance.

The FTSE 100 group had previously guided for full-price sales to be up by 2 per cent, offering a boost to retail in the run up to the crucial Christmas trading season.

Next said that weekly sales fell by up to 7 per cent in September amid a heatwave, and were also lower during the first half of October. They bounced back as colder weather kicked in towards the end of October.

The high street giant said that the “volatility in sales performance is a result of changing weather conditions rather than any underlying changes in the consumer economy”.

Next, led by Lord Wolfson of Aspley Guise, is a multinational clothing, footwear and homeware retailer with headquarters near Leicester and about 700 shops around the UK. It also sells thousands of third-party products and hundreds of brands, including Tesco’s F&F Clothing, Lipsy and Barbour, through its label website.

Next has sought to create additional value with Total Platform, its pay-as-you-go service that offers third-party brands access to the retailer’s online logistics, marketing, warehousing and back-end systems. It has started buying majority stakes in brands, including FatFace, and Joules, and putting them on the platform to create an additional income stream and boost its £8.8 billion market value.

In September, the high street chain increased its stake in Reiss to 72 per cent in a deal that values the label at almost £400 million. Next said the additional equity stake in Reiss would result in an exceptional accounting gain (non-cash) of about £110 million that is excluded from the annual headline profit.

Next, which is often the first high street retailer to update on trading over the crucial “golden quarter”, will present its Christmas trading update on January 4.

Shares in Next rose 194p, or 3 per cent, to £70.78 in morning trading.