StockMarketWire.com - Fashion retailer Next upgraded its annual profit guidance and said it would pay special dividends, having enjoyed a stronger-than-expected sales performance so far in the second quarter.

Pre-tax profit for the year through January, on a pre-IFRS 16 basis, was now expected at £750 million at the 'central' guidance level, up from previous guidance given in May of £720 million.

Next said the new figure represented a 3% increase compared to the 2019/20 financial year, which is said represented a more meaningful comparison to the most recent financial year.

Full-price sales in the 11 weeks to 17 July were up 19% versus two years ago, beating previous mid-range guidance assuming an increase of 3%.

Next said it had upped its full-price sales guidance for the rest of the year to 6% growth, from 3%.

It added that the upgraded profit guidance was towards the top of its previous guidance and accounted for the profit from additional sales and the cost of an unplanned repayment of business rates relief.

Surplus cash for the full year was forecast to be £240 million, to be distributed to shareholders through special dividends during the current financial year, the first to be paid in September.

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