• H1 brand sales up 3.2%
  • Overall retail sales down 1.7%
  • Expects “benign” 2012 for cost price inflation

Fashion retailer Next is maintaining its internal full-year profit forecast after the brand’s sales rose 3.2% in the year to 30 July, towards the upper end of the company’s guidance figure.

Retail sales fell 1.7%, the UK company said, but sales from new space edged up 1.7% and Directory sales surged ahead by 15.1%.

The latter figure, Next added, was “somewhat flattered” by an increased allocation of sale stock, with full-price sales up 13.3%.

“We expect the cost price inflation experienced in the first half of 2011 to continue into the second half at broadly the same rate of +8%,” Next said, but added: “2012 looks like it will be a more benign year for cost price inflation.

“The combination of a sharp reduction in cotton prices, an easing of manufacturing capacity constraints in the Far East and the annualising of this year’s VAT increase all mean that selling prices are unlikely to rise further for spring 2012.”

Next is due to release interim results for the six months to 30 June on 14 September.