Clothing chain Next has said that it is cautiously optimistic that sales will recover in the second half of the financial year, after unseasonably warm weather meant slower sales in the first half, leading the retailer to cut its full-year expectations.

In a trading update covering November and December, the company said that sales were up 2.9%, towards the upper end of the fourth quarter sales guidance range issued in its October Statement. Total sales for the year to 24th December are up 7.7%.

In a statement, Next said: “As expected, we went into the end of season sale with significantly more stock than last year. Clearance rates, so far, have been in line with our expectations and we now expect full year profits to be within £10 million either side of £775 million, which is £5 million ahead of the midpoint profit guidance we issued in October.

“The economic outlook for the UK consumer looks relatively benign. Low inflation, an end to real wage decline, healthy credit markets and strong employment all paint a somewhat more positive picture than recent years.

“However we remain very cautions in our sales budgets for the year ahead. In Spring and Summer the Company will face very tough comparative numbers. As we pointed out in our September Interim Announcement, during the first half of 2014 sales were significantly assisted by unusually warm weather. There is potential upside in the second half as our sales comparisons weaken, although uncertainty in the UK political outlook and turbulence in the international economy present potential downside risks.”