UK fashion retailer Next on Wednesday lifted full-year profits guidance after second quarter full price sales smashed expectations.
In an unscheduled trading update, the company said it now expected annual pre-tax profits of £750m, up £30m from previous forecasts and towards the top end of estimates.
Total full-price sales rose 18% in the three months to July 17 after the lifting of Covid restrictions and people returned to physical stores. The company, which had assumed sales would rise by around 3%.
Online sales rose 44% year on year, but were down from 65% in the previous quarter as customers returned to physical stores after the easing of restrictions.
Next added that it was also repaying £29m in business rates relief after consultation with major shareholders.
Soaring sales were attributed to a combination of pent-up demand for adult clothing, the onset of warm weather at the end of May and start of June, and an increase in spending from fewer holidays abroad and consumers savings acquired in lockdown.
Next, which has a track record of under-promising and overdelivering, said it expected second-half sales sales for the year to January 2022 to rise by 6% rather than 3%.
Next said surplus cash for the year was forecast to be £240m, which it planned to give to shareholders via special dividends, the first of which would be paid in September.
