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Next raises profit target after sales rebound over Christmas

Next, the UK’s second-largest clothing retailer, increased its annual profit target and said sales rebounded in the last six months after shoppers bought more of its women’s fashion ranges in the build-up to Christmas.

Sales at stores open at least a year rose 3.2pc in the 22 weeks ended December 24, the retailer said today in a statement. That was better than Next’s forecast for growth on that basis of zero to 3pc, and an improvement on the third-quarter’s 1.3pc decline.

Next raised its goal for full-year pretax profit to as much as £500m (€556m) today, after increasing it to £472m in November, and said its post-holiday clearance sale has “gone well”. The retailer refrained from pre-Christmas discounts and has been adding more fashionable women’s clothing lines to improve revenue.

“The brand is in a much stronger position now versus 18 months ago,” Andy Hughes, an analyst at UBS AG, said in a report before the release.

“Next ranges seem to have been well received, and Directory continues to benefit from online penetration and a stronger home market,” he said. Hughes has a “buy” recommendation on Next shares.

Competitor John Lewis Partnership Plc, the owner of the UK department store chain, yesterday reported same-store sales climbed 13pc in the last five weeks as Britons defied the recession and bought more clothes and gifts.

Sales at the Next Directory home shopping unit climbed 6.8pc, the retailer said today. That compares with the company’s target for a 4pc to 6pc increase.