Next growth in the spotlight after shrugging off high street pressures

Investors will be hoping Next can point towards continued sales growth after positive recent updates by the retail giant.

Experts have said expectations will be “sky-high” for the group’s half-year results on Thursday September 17 after over-delivering in recent updates.

Last month, Next upgraded its profit guidance for the second time this financial year after revealing sales were stronger than expected in the second quarter.

It had revealed a surge in sales linked to hot weather and the release of pent-up demand in the Middle East.

The fashion and homeware retailer is expected to confirm next week that total full-price sales, which excludes discounts and clearance items, increased by 9.2% over the 13 weeks to August 1, compared with the same period last year.

Next owns a number of brands including Cath Kidston (Mike Egerton/PA)

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The company improved its sales guidance in August after previously indicating sales were likely to rise by around 4% in the quarter.

As a result, it is set to confirm that sales grew by around 7.7% over the first half of the year.

It is predicting full-price sales growth of around 6.3% for the year and a pre-tax profit of around £1.24 billion for the year.

However, investors will be hopeful that positive momentum will allow the company to deliver another improvement in its guidance next week.

Richard Hunter, head of markets at Interactive Investor, said: “Expectations will, as ever, be sky-high for Next, whose tendency to under-promise and over-deliver has led to an almost guaranteed profit upgrade, while leaving analysts scratching for new superlatives.

“The group’s second quarter update was no exception, with Next breezing past its own estimates and raising its profit guidance for the year as a whole.”

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “That outlook may prove overly cautious, given Next’s core middle-aged and middle-income customers are proving relatively resilient in the current economic climate.

“As a result, further small guidance upgrades over the second half can’t be ruled out.”

But Next, which also owns brands including FatFace, Cath Kidston and Made.com, is still expected to report a dip in sales from its stores for the year so far, as high street footfall comes under pressure on cautious sentiment among shoppers.

Shareholders will be keen for the group to shed more light on how its customers are faring financially and whether it can benefit from shoppers trading down from more expensive competitors.