(Bloomberg) -- Next Plc raised its guidance for the year after the British fashion and homewares company said shoppers ordered more of its products from abroad.
The shares rose almost 9% in early London trading, after the retailer said full-year pretax profit is now expected to reach £980 million ($1.3 billion), up from previous guidance of £960 million. It maintained that annual group sales will rise 6%.
Next said full price sales rose 3.2% in the 13 weeks to July 27, having previously told investors to anticipate a fall in sales after warm weather last summer. Overseas online sales were much better than expected, the company said, soaring 22%.
The upgrade comes as other British retailers struggle to recover from shoppers spending less during the cost-of-living crisis. While inflation has hit the Bank of England’s target, most consumers are still cutting back on spending.
Chief Executive Officer Simon Wolfson is known for his bearish forecasts and often beats expectations, with Next’s share price now up 20% this year. Next has hundreds of stores and a large online operation, making its performance a closely watched indicator of broader retail conditions.
The company has been on an acquisitive streak in recent years, buying brands including Fat Face, Joules, Cath Kidston, and Made.com. The company also has control over UK fashion house Reiss.
Next’s overseas performance “is a helpful reminder of the improving quality of investment proposition given a broad push across brands and geographies,” said James Grzinic, an analyst at Jefferies. Investors will anticipate further upgrades in the coming months, he added.
(Updates with share price and additional detail throughout.)
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