Bad spring won't halt Next's full-year prediction
Retailer Next was hit by an "abnormally cold spring" but has told investors it's still on track to post full-year profits of between £615m (€726m) and £665m (€785m).
In a trading update, the company said total sales, excluding VAT, in the first 14 weeks of its financial year were 2.2pc higher, with 1.5 percentage points of that rise derived from new selling space.
While sales at its retail outlets fell 1.9pc, sales at its 'Directory' unit jumped 8.9pc.
"It is apparent that the poor March figures were down to an abnormally cold spring, equally the good weeks since mid-April have been boosted by pent-up demand from the previous month," the company said.
"We believe that neither period is indicative of any significant change in the underlying economy."
It said the trading has been "volatile", particularly in March and early April.
"The marked upturn in sales in mid-April corresponds to the break in the very cold weather," said Next, which has over 500 stores across the UK and Ireland.
The company also said that it remains cautious about the consumer environment, adding that the sales rise experienced in the first 14 weeks is the "best guide for future performance".
"We anticipate that the continuing decline in real earnings will depress discretionary spending for at least the next eighteen months, if not longer," it warned.
Despite the downbeat assessment, shares in Next were up over 3pc as its sales in Q1 beat estimates. Analysts had been expecting a 1.1pc rise compared to the 2.2pc Next recorded.