Next raises profit outlook again as warm weather boosts summer sales

By James Davey

LONDON, Aug 5 (Reuters) - British clothing retailer Next edged up its annual profit outlook for the third time this year on Wednesday, as it reported a better-than-expected 9.2% rise in second-quarter full-price sales, benefiting from the country's warm weather.

Shares in Next, which trades from more than 800 stores in the UK and Ireland and has an online operation serving the UK and overseas, rose 7% in early trade, extending their gain so far in 2026 to 19%.

Next had forecast that second-quarter full-price sales growth would slow to 4.0% after growth of 6.2% in its first quarter, reflecting a tough comparative number in the same period last year.

SALES AHEAD OF FORECAST

However, sales were £70 million ($94 million) ahead of forecast in the 13 weeks to August 1 – £19 million in the UK and £51 million overseas.

Next attributed the outperformance to the weather in the UK being as warm as last year's exceptional summer, which it had not anticipated, and the release of pent-up demand in the Middle East and Northern Europe after a weaker first quarter in both territories.

Also, Next said it was able to spend much more on profitable marketing than it had anticipated.

The group said it now expected a profit before tax of £1.243 billion in the year through January 2027 , versus previous guidance of £1.218 billion and the £1.158 billion made in 2025/26.

Next kept its forecast for full-price sales for the rest of the year to be up 5.0% versus last year.

Overall British retail sales rose unexpectedly in June as shoppers increased their spending on air conditioning and clothing, official data showed last month, adding to signs of a pickup in the economy spurred by weather and the soccer World Cup.

The data chimed with a GfK survey of improved sentiment among consumers, helped by hopes about Britain's new prime minister, Andy Burnham, despite concerns about the war in Iran.

Separately on Wednesday, the Financial Times reported that John Lewis has warned employees that the department store chain’s profits are being squeezed by “really tough” trading conditions.

($1 = 0.7432 pounds)

(Reporting by James Davey; editing by Paul Sandle and David Holmes)