LONDON — British clothing retailer Next Plc reported an 18.6 percent rise in net profits to 257.7 million pounds, or $432.7 million, in the six months to July 2014, compared to the same period last year, while total revenues during the period climbed 10.3 percent to 1.85 billion pounds, or $3.10 billion.
All dollar figures have been calculated at exchange rates for the period to which they refer.
The firm attributed the sales growth, what it described as its “strongest…for many years,” to its improved and extended clothing ranges, opening profitable new retail space, improving service and growing its online business in the U.K. and overseas.
But Next noted that macroeconomic factors, such as low interest rates, the improving economy, better summer weather and less discounting in the U.K., had also helped boost its sales.
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“We remain mindful that some of these factors are likely to be less favorable next year, and this year’s fine summer weather could present tough comparatives next year, when interest rates are also expected to rise,” Next chief executive Simon Wolfson stated.
Next’s retail business grew 7.5 percent during the six months to 1.08 billion pounds, or $1.81 billion, while its online directory business gained 16.2 percent to 694.3 million pounds, or $1.16 billion. Directory sales in the U.K. grew by 11.5 percent, while those overseas were up 80 percent.
Next noted that Label, its third party branded clothing business, “is beginning to make a small but meaningful contribution to the group.”
Looking ahead, the retailer said it maintained the full year sales and profit guidance it gave in its July trading statement, with profits for the full year to January 2015 forecast to be between 775 million pounds, or $1.31 billion, and 815 million pounds, or $1.38 billion.
Next expects its total brand sales growth for the year to be up between 7 percent and 10 percent, with third quarter sales forecast to rise 10 percent and fourth quarter sales 4 percent, the latter a result of strong comparatives with the previous year.
Over the current year, Next noted that it plans to continue to improve its product and design — including being “more ambitious” in adopting new trends — along with delivering weather-appropriate ranges and continuing to introduce premium products.
The firm has also opened a new 3.8 million pounds, or $6.4 million, women’s wear and home design studio. The company plans to continue to open larger format stores, develop its directory business in the U.K. and overseas and develop Label, which carries third party, premium brands.