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LONDON, Oct 30 (Reuters) - Next, Britain's secondbiggest clothing retailer, edged up its year profit guidance onWednesday after posting third quarter sales a touch aboveexpectations.
The group, which trades from over 500 stores in Britain andIreland and about 200 stores in over 30 countries overseas, aswell as through its Directory internet and catalogue business,said trading had been volatile but did not mention unhelpfullywarm autumnal weather as it reported total sales up 4.3 percentin the 13 weeks to Oct. 26.
That outcome was just above Next's guidance for sales growthof 1-4 percent in its second half and represented anacceleration from growth of 2.3 percent in the first half.
Next was reliant on a strong performance from Directory,where sales increased 10.7 percent. Sales at traditional storesrose 0.4 percent.
Though data and surveys have indicated the outlook isimproving for UK consumer spending, which generates abouttwo-thirds of gross domestic product, retailers are generallystill cautious as inflation continues to outpace wage rises.
Tesco, Sainsbury's and Debenhams have all recently said they are not counting on the pace of anyconsumer recovery picking-up significantly in 2014.
Annual growth in British retail sales unexpectedly ground toa halt over the past month, hit by the first big fall insupermarket sales since February, the Confederation of BritishIndustry (CBI) said on Monday. It said there was optimism thestalling of growth was just a blip.
Next has generally been able to defy the tough macroeconomic background helped by its strong online offer, new storeopenings and diversification into new product areas, such ashomewares, as well as new overseas markets.
The firm said it now expected a 2013-14 pretax profit of650-680 million pounds ($1.04-$1.09 billion), a year-on-yearincrease of 4.6-9.4 percent. It previously guided to a pretaxprofit of 635-675 million pounds.
Its sales forecast for the year was raised to up 2.0-3.75percent from up 1.5-3.5 percent, while its forecast for earningsper share (EPS) was increased to up 15-21 percent from up 12-19percent.
EPS will be enhanced by share buybacks of at least 300million pounds, of which 295 million pounds has already beenpurchased, as well as a lower tax rate.
Shares in Next, up 45 percent over the last year, closedTuesday at 5,205 pence, valuing the business at 8.12 billionpounds.
