Next has raised its full-year profit guidance for the third time this year as it outperforms its own expectations.
Increases in retail and online sales of 0.5% and 5% respectively meant the retailer recorded a revenue of £2.5bn during the six months to 30 July 2023.
During the same period, the clothing retailer’s pre-tax profit saw a year-on-year increase of 4.8% to £420m.
Next now expects to record a full-year pre-tax profit of £875m, up from its previous estimation of £845m. This a 0.5% increase on last year.
The retailer also upped its full-year sales guidance to 2% higher than last year, an increase on its earlier predictions of a 0.5%.
In August, Next increased its full year profit guidance by £10m after enjoying a period of increased sales during the second quarter.
Next said that it long-term outlook was more positive than it had been for many years, as inflationary pressures and operating costs continue to ease.
The retailer said: “In reality, we were overly cautious about the prospects for sales in the current year, we underestimated the support nominal wage increases, and a robust employment market, would give to our top line,” the retailer said.
“Sales are better than expected; Online service has significantly improved; costs are lower than expected and, although it is early days, and there have been bumps along the road, all three streams of new business are showing signs of promise.”
Despite this, Next expects to close 11 mainline stores this year. The retailer said that six of these closures are in locations where it forecasts that the store would not achieve its target margin on almost any terms, two are due to the site redevelopments, and the remaining three a result of being unable to agree acceptable new terms with landlords.