Next PLC lifted profit guidance on Thursday after second-quarter sales came in ahead of forecasts, as hot weather in the UK encouraged people to dress up and go out.

Full-price sales for the second quarter that ended July 30 rose 4.5% year-on-year, slowing from a 22% climb in the first quarter, but still topping expectations. Compared to pre-Covid times, second-quarter full-price sales were 26% higher.

Next said full price sales were £50 million ahead of guidance.

‘In part, we believe this over-performance has been the result of unusually warm and dry weather in June and July. A marked return to formal dressing, perhaps driven by pent-up demand for social events, has also played to the strengths of the Next brand,’ it said.

Next lifted annual pretax profit guidance by £10 million to a new outlook of £860 million, which would be a 4.5% rise from £823.1 million in financial 2022.

Next added: ‘Sales in the first half of the year have been dominated by a sharp reversal of last year’s lockdown trends. Sales in retail stores recovered, while online growth appears to have reverted back to its longer term trajectory. Many product trends have also returned to pre-pandemic norms. Lockdown winners such as home and sportswear retreated, while formalwear returned to favour. As anticipated, online returns rates and surplus stock also reverted to pre-lockdown levels.’

The company added that it has spent £224 million this year so far on share buybacks at an average price paid per share of £63.85, equating to 3.5 million shares. It said if profits are in line with the proposed guidance, then the equivalent rate of return on these buybacks will be 10.6%.

Shares were up 2.0% at 6,882.00 pence each on Thursday morning in London.

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