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Next Plc raised its guidance for the second time in recent months after wet weather and sticky inflation failed to deter shoppers from buying fashion.
Full-price sales in the second quarter rose nearly 7% on last year, according to the company’s earnings report. That has driven Next to increase its forecast for profit before tax by £10 million ($12.7 million), to £845 million, this year.
Next shares rose slightly in early trading in London.
The UK clothing retailer already raised its guidance in June, saying that consumers were buying more clothing thanks to salary increases and warmer weather. The company is often considered a bellwether for the health of Britain’s retailers.
There are some signs inflation in the UK is waning. Prices in UK stores fell for the first time in two years in July, the British Retail Consortium said. Still, higher mortgage rates threaten to erode consumers’ disposable income. Next’s guidance also implies a slowdown in the second half, indicating the company expects consumers to be less willing to spend their cash, Jefferies analyst James Grzinic said.
Outside of the UK, European apparel makers and retailers have been reporting mostly positive results this earnings season.