Better than expected revenues in October have encouraged apparel retailer Next to raise its sales guidance for the rest of the year.

The UK company said both Next Retail and Next Directory were performing ahead of the second half guidance it had offered in September.

Total sales were up 3.1% in the third quarter, with retail sales lifting 2.2% and Directory sales increasing 5.1%. Retail like-for-likes were down 1.3%.

"The consumer environment remains subdued, but has been more benign than we anticipated," Next said.

"Inflation and mortgage rates remain encouragingly low and the fall in employment has been contained to around 2%."

Thanks to the "noticeable pick-up" in October sales against last year's weak comparatives, the company now expects retail like-for-likes in the second half as a whole to be flat to down 3%, while Directory sales are predicted to rise by 4-6%.

Taking these forecasts into account, Next said the performance should raise the market consensus of a full-year pre-tax profit of GBP442m (US$731m) by GBP30m to about GBP472m.

The company is due to report on pre-Christmas trading on 6 January.