UK clothing retailer Next plc has reported a 4.1% increase in sales for the 13 week period to 1 May 2010, but remains cautious on the UK trading environment for the remainder of the year.

The retailer was buoyed by a 7.2% surge in sales from its directory channel during the first quarter.

Like-for-like sales rose 2.2% including direct, but fell 0.8% excluding direct.

Meanwhile, the company forecast a 0.5% to 3.5% sales increase for the first-half of the year, with directory again exceeding expectations.

Next expects profit before tax forecasts at the top end of City forecasts, most of which fall between GBP525m (US$795m) and GBP565m, on the back of a 1% margin improvement.

The chain expects the forthcoming general election to result in tighter spending in the UK.

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By GlobalData

A statement said: “We remain very cautious in our outlook for the year ahead. Prior year comparisons become more demanding as the year progresses and we anticipate that a new Government will have to take action to tackle the budget deficit. Whatever form this action takes, it is likely that it will act to restrain growth in consumer spending.”

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