British fashion retailer Next maintained its guidance for annual profit after reporting a smaller decline in first-quarter sales than it expected, saying it was too early in the year to change its outlook.

British consumers have been squeezed by inflation that hit a 41-year high of 11.1 percent in October and has remained in double digits since, including March’s stronger-than-expected reading of 10.1 percent.

Next, which trades from about 500 stores and online and is considered a good barometer of how British consumers are faring, said on Thursday full price sales fell 0.7 percent in the 13 weeks to April 29, better than its guidance for a 2 percent fall.

Next shares were up 1.2 percent in early trading.

“Although our first quarter performance moderately exceeded our sales guidance, we believe it is too early in the year to alter our overall sales expectations for either the half or full year,” Next said.

It stayed cautious, forecasting a 1.5 percent decline in 2023-24 full-price sales and pretax profit of £795 million ($1.0 billion), down from the £870.4 million made in 2022-23.

Next forecast a 5 percent fall in second quarter full price sales, noting the same period last year benefited from unusually warm weather and pent-up demand for events such as weddings.

It also said some of the first quarter’s success, particularly in holiday clothing sales leading up to Easter, may have been pulled forward from the second quarter.

Next has guided to a 7 percent rise in prices for its spring and summer ranges.

The group has shown more resilience than most to Britain’s cost-of-living crisis and is considered by analysts to be one of the best run retailers in the country. Its shares are up 12 percent so far this year.

In Next’s first quarter, store sales fell 0.6 percent, online sales were down 1.6 percent, while finance interest income rose 7.4 percent.

Next’s statement made no comment on default rates in its credit business.

On Wednesday, British bank Lloyds reported early signs of stress among some borrowers.

By James Davey; Editors: Paul Sandle and Christina Fincher

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