Next increased full-price sales by 0.3% year-on-year for the second quarter ended July 30 but said trading remains “extremely volatile and highly dependent on the weather”.
The retailer went into its end-of-season Sale with significantly more stock than last year but said the Sale has gone well and clearance rates are ahead of expectations.
Total retail sales increased by 1.8% compared to the previous year.
Next said it is too early to comment on the Brexit effect on short-term consumer demand but that the devaluation of the pound is likely to affect the cost price of goods in the medium term. It is hedged for the year to January 2017 and expects cost prices in 2017/18 to rise by less than 5% on like-for-like products.
It plans to improve capabilities in new and developing supplier countries including Bangladesh, Cambodia and Burma, while increased competition in areas such as China may help to mitigate some of the effects.
The firm said it expects the consumer environment to remain tough for the rest of the year and it is forecasting for full-price sales growth in the third quarter to be worse than in the second quarter.
Pre-tax profit for the year is expected to be between £775m and £845m, compared to previous guidance of £748m and £852m.