UPDATE 1-UK retailer Next nudges full-year outlook higher

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LONDON, Sept 14 (Reuters) - British clothing retailer Next nudged its full-year sales and profit guidance higher on Thursday after seeing an improvement in trading in the last three months, helped by demand for its directory business.

Britain's most successful clothing retailer this century, in terms of profits, has faltered over the last two years due to a broader slowdown in spending on fashion and footwear that it first identified in 2015.

Its first-half profit fell by 9.5 percent to 309.4 million pounds ($409 million), its second year of decline, with its stores business struggling due to falling sales and a high fixed cost base.

But it lifted its guidance for full-price sales for the year for the second time in less than two months after the business stabilised.

"Our performance in the last three months has been encouraging on a number of fronts and whilst the retail environment remains tough, our prospects going forward appear somewhat less challenging than they did six months ago," it said.

Next said it now expected its full-year sales to come in between -2.0 percent and +1.5 percent, from a previous range of between -3.0 and 0.5 percent in August, which had itself been increased.

The mid-point of its profit guidance moved up by 7 million pounds to a target of 717 million pounds, it said.

($1 = 0.7571 pounds) (Reporting by Kate Holton, Editing by Paul Sandle)