Next Second-Quarter Sales Accelerate as Profit Outlook Tightened

LONDON, United Kingdom — Next Plc, the UK's second largest clothing retailer, said sales accelerated on new store openings as it sharpened its sales and profit forecast for the year.

Sales under the Next brand, incorporating both shops and the Directory home-shopping service, increased 0.3 percent in the second quarter, the Leicester, England-based company said in a statement Wednesday. That is an improvement on a decline in the first quarter and compares with the 0.6 percent increase estimated by analysts surveyed by Bloomberg.

Next also narrowed its forecast for full-year sales growth to fall within a range of negative 2.5 percent to a gain of 2.5 percent. The company had previously seen a range of negative 3.5 percent and 3.5 percent growth. It also raised the low end of its profit forecast to be at least £775 million ($1.03 billion), up from £748 million before.

“We expect the consumer environment to remain tough for the rest of the year,” chief executive officer Simon Wolfson said in the statement. “Quarter three will be particularly challenging as it was our best quarter last year.”

Next’s status among investors as the UK’s most reliable retailer — earned after seven consecutive years of profit growth — has come under threat in 2016. The company has cut its sales forecast twice amid waning consumer confidence, intense competition and unseasonal weather conditions.

The retailer said it hasn’t yet seen any “appreciable effect” on consumer behaviour in the wake of the UK’s vote to leave the European Union.

By Sam Chambers; editor: Matthew Boyle.