Next Sees Profit Above Forecast Despite Weak Shops

British clothing retailer Next expects annual profits to be slightly ahead of analysts' current consensus forecast, with tight cost controls and strong online sales helping to offset tough trading at its shops.

Next, the first major British retailer to give an indication of its performance in the run up to Christmas, said on Thursday it expected annual profit before tax to be within a range of 463 million pounds ($913 million) to 473 million pounds.

"In a challenging year we will have increased group profits through good control of stocks, margins and costs, along with a strong sales performance in Next Directory," the mid-market retailer said on a statement.

Sales at the online and home shopping Directory business rose 9.3% in the period from July 31 to Dec. 24, compared with a 6.9% fall in like-for-like sales at Next's 308 shops which have been unaffected by new openings.

Analysts had predicted Next would undershoot its targeted sales performance of minus 2 to minus 5% at its stores in the second half of its financial year.

Next shares closed at 18.47 pounds on Wednesday, valuing the business at about 4.2 billion pounds.