FASHION retailer Next has upped its full-year profit guidance by £25m after better-than-expected first-half sales.

The group said it is on course to lift profits to between £775m and £815m.

The results, for the 26 weeks to July 26, mean the group is firmly on track to extend its advantage over high street rival Marks and Spencer, which is expected to make £663m.

Retail sales rose 7.5 per cent, though this increase was slower in the second quarter than the first.

The group's catalogue and online division boosted revenues by 16.2 per cent, including a stronger second quarter.

The company said sales were ahead of its 5.5 per cent to 9.5 per cent full-year guidance and that it was raising this range to up to ten per cent.

Bosses acknowledged the guidance could appear slightly negative, but warned of previous poor sales, which were hampered by bad weather.

A report said: "It might appear overly cautious to forecast a full-year sales range below our current rate of growth.

"However, last year’s first two quarters were hampered by a particularly cold Spring and Easter, which presented a soft comparison for this year.

"Last year, sales progressively improved through the year and this pattern makes estimating second half sales particularly difficult.

"That's why our guidance for the next six months is for growth of between four per cent and ten per cent."

The firm also said it was continuing to return cash to shareholders, following special 50p dividends in February and May, with a third being paid this week, though no more are anticipated in the year.

It means the group has now paid or declared £223m of special dividends and returned £105m through share buybacks, in the year so far.

Last month, Next was hit with the resignation of long-serving executive Christos Angelides.

The product director, who has played a key role during three decades with the firm, is leaving to join US retailer Abercrombie & Fitch.