FASHION retailer Next is set to deliver a rise in half-year profits this week after enjoying spells of warm weather over the summer months.
The group recently told investors that full-price sales rose 3.5 per cent in the first half to 25 July, helped by a 7.5 per cent increase at its Directory home shopping business.
Following the better-than-expected performance, Next lifted the mid-point of its full-year profit guidance from £835 million to £845m, and said it was looking for sales growth of up to 6 per cent.
Analysts at RBC Capital Markets expect Thursday’s results will show a pre-tax profit of about £340m, up from £324.2m a year earlier.
However, the broker said the prospect of an increase in borrowing costs could “disproportionately affect” Next, which generates about 95 per cent of sales from its home market.
“Next is exposed to any slowing in UK consumer spending growth and pressures on disposable income, particularly from interest rate rises,” said RBC, which has a target price of 8,000p on the firm’s shares.