* Sales in last 7 weeks up 4%
* Profit outlook raised for second time in two months
* Central guidance is 2020-21 profit of 300 mln pounds
* Rivals Inditex and H&M also showing signs of recovery
(Adds context from Inditex, H&M)
By James Davey
LONDON, Sept 17 (Reuters) - British clothing retailer Next
raised its profit outlook for the second time in two
months as it reported strong recent trading, helped by cooler
weather and shoppers having more spare cash because they aren't
spending on foreign holidays.
Shares in Next were 2.3% higher at 0935 GMT as it followed
the positive trend set this week by H&M and Inditex
, the owner of Zara, as retailers start to recover from
the mass closure of shops caused by coronavirus lockdowns.
"Even in the event of another (national) lockdown it looks
like the company will still make a significant profit and still
reduce its year-end debt," Next Chief Executive Simon Wolfson
told Reuters.
What Next calls its central guidance now assumes a pretax
profit of 300 million pounds ($389 million) in the year to the
end of January 2021. That is up from its view in July of 195
million pounds but less than half the 729 million made in
2019-20.
Inditex, the world's largest clothing retailer, said on
Wednesday it had returned to quarterly profit in the May to July
quarter and that current trade showed a progressive return to
normality.
H&M on Tuesday beat quarterly profit forecasts, helped by
more full-price sales and strong cost control.
SALES GROWTH TO SLOW
Next, which trades from about 500 stores in the UK and
Ireland, as well as 184 overseas outlets, and its Directory
online business, said full-price sales in the last seven weeks
were up 4% year-on-year.
Next, which does more than half of its business online,
does not expect to sustain that growth. Its central scenario
assumes that sales will be down 12% for the rest of the year.
That factors in the end of the UK government's furlough job
support scheme in October, colder weather worsening the effects
of the pandemic and tightened social distancing rules depressing
demand for gifts and clothing associated with traditional
Christmas family gatherings.
The group forecast a 462 million pound reduction in net debt
for the current financial year and Wolfson said it was looking
for more small acquisition opportunities thrown up by the
crisis.
The impact of coronavirus was stark in the six months to the
end of July, when Next reported profit of only 9 million pounds,
with full price sales down 33%.
($1 = 0.7728 pounds)
(Reporting by James Davey; Editing by Simon Cameron-Moore and
Mark Potter)