British clothing retailer Next reaffirmed full-year guidance that was cut in September as it reported a 0.4 percent rise in third-quarter full-price sales, slightly ahead of its expectations, sending its shares higher.
Next, which trades from about 500 stores and online and is often considered a gauge of how British consumers are faring, said on Wednesday it still expected full price sales for the rest of its 2022-23 year to fall 2 percent and a full-year pretax profit up 2.1 percent to £840 million ($967 million).
The group said full-price sales in the last five weeks of its quarter to Oct. 29 were up 1.4 percent, boosted by one particularly strong week at the end of September, when temperatures dropped and sales of heavier weight products improved.
Over the quarter store sales in the UK and Ireland were up 3.1 percent, while online sales fell 1.9 percent.
Shares in Next were up 3.6 percent at 08:42 GMT.
UK consumers have been reining in their spending with inflation hitting 10 percent. They also face the prospect of a tighter squeeze in 2023 after finance minister Jeremy Hunt said he would scrap tax cuts planned by former prime minister Liz Truss and scaled back her vast energy support scheme for households.
A survey published last month showed consumer confidence remained close to a record low as households responded to the combination of high inflation and Britain’s chaotic politics.
Next has shown more resilience than most but its shares are still down 36 percent this year.
Its rivals Primark, Boohoo and Asos have all warned on the profit outlook in recent months as they face higher energy and staff costs and a weak pound.
E-commerce giant Amazon has also warned of a slowdown in sales growth in Europe this Christmas.
“Next faces UK consumer headwinds, however over the long-term we continue to believe that Next should be able to achieve a higher rate of sales growth than the 2 percent that it has achieved historically,” analysts at RBC Europe said.
By James Davey; Editors: Louise Heavens and Jason Neely
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Next Cuts Profit Forecast as Shoppers Feel the Squeeze
British clothing retailer Next cut its profit and sales forecasts, saying August trading was below expectations and cost of living pressures were set to rise in the coming months.
