Fashion and home goods retailer Next has reported an ‘improvement’ on its first quarter with sales in Q2 up by 0.3%.

According to its latest trading statement for the 26 weeks to 30 July 2016, Next revealed that sales improved across the board to push overall income back into positive territory from is 0.9% fall in Q1.

Sales in Next Retail showed signs of encouragement, improving from -4.7% to -3.3%, whilst Next Directory sales grew to 5.7% from 4.2%. Next said that it predicted its annual profit would be higher than expected, giving a guidance of £775m to £845m.

Despite the upturn in figures, Next aired a cautious voice, warning that trading would be ‘challenging’ in Q3 against its best quarter recorded last year, with weak consumer demand for clothing, alongside weather conditions playing a role. 

In a statement, Next said: “Trading remains extremely volatile and on a week-by-week basis is highly dependent on the weather. This volatility is indicative of the underlying weakness of consumer demand for clothing, which we believe we began to experience in October 2015.”

Furthermore, Next highlighted that it expects costing rates ‘to be around 9% worse’ than 2016/17, as a result from the sterling devaluation following Brexit. The retailer ‘estimated’ that cost prices in 2017/18 would rise by less than 5% on like-for-like products.