Fashion chain Next today posted “robust” half-year results after cost cutting and a focus on margins helped profits rise 15% in testing conditions.
The improvement to £213m (€254m) in the six months to the end of July came despite a 1.5% drop in like-for-like sales at its core high street business.
Next repeated its warning last month that selling prices were likely to rise by between 5% to 8% next spring due to factors such as higher VAT and cost price pressures, including this year’s 45% rise in the price of cotton.
It is also expecting little in the way of growth in consumer spending in the foreseeable future but said it still expected profits for this financial year to be between 6% and 11% higher – to £535m (€638m) to £560m (€668m).
“Next does not expect a double dip recession nor do we anticipate a meltdown in consumer spending, not least because overall employment levels are holding steady,” the company said in its interim results statement.
And while high street sales were towards the lower end of Next’s previous guidance, the Next Directory home shopping business has produced a better-than-expected performance after a 7.8% rise in first half sales.