Next raises profit guidance following strong half-year results

Retailer Next has raised its full-year pre-tax profit guidance for a second time following better-than-expected half-year results. The company reported a 10.5% increase in pre-tax profit to £569 million for the six months ending in July, driven by strong online and international performance.

While international sales grew by 24%, the company lowered its UK sales growth forecast for the second half of the year from 2.8% to 2%. Chief Executive Lord Simon Wolfson cited rising living and mortgage costs, a cooling labor market, and inflation-related pressures as significant risks to consumer spending.

Wolfson also warned the UK government against implementing further tax increases in the upcoming Budget, stating that the current tax burden is at its highest level in over 60 years and that additional hikes could stifle economic growth. Despite these domestic concerns, Next's international direct-to-consumer business and its portfolio of licensed brands showed strong growth.