Clothing retailer Next has today raised its full-year profit guidance for the third time in four months as it reported a 4.8% rise in the first half.
But it cautioned a softening in the labour market could dent demand in its next financial year.
Next, which trades from about 500 stores and online and is often considered a gauge of how consumers are faring, said today it was likely that inflationary pressures on selling prices and operating costs would continue to ease in its 2024/25 year.
But it cautioned that the labour market was softening. It said while this may reduce pressure on wage inflation, it may also somewhat dampen growth in consumer demand in 2024/25.
For the full year to January 2024, Next said it now expected to report a pretax profit of £875m, up from a previous expectation of £845m and up from the £870.4m it made in the previous year.
It also raised its guidance for full price sales growth to 2.6% from 1.8%.
For the six months to July 29, Next made a pretax profit of £420m, on full price sales up 3.2%.
While industry data showed consumer spending lost pace last month, Next's rivals Marks & Spencer and Primark/Penneys owner AB Foods have both raised their profit outlooks in recent weeks.
Next is considered by analysts to be one of the best run retailers and its shares are up 22% this year.
Looking to the 2024/25 year, Next said inflation in the cost of the products it buys was easing, while other costs, such as electricity, will be less severe.
