LONDON, United Kingdom– British clothing retailer Next Plc reported first-half profit that met analysts' estimates, as strong sales in July in stores and online were offset by a higher proportion of goods sold on markdown.

Pretax profit fell 1.5 percent to £342 million ($453 million) in the six months through July, the company said in a statement Thursday. Analysts surveyed by Bloomberg expected £341 million. The retailer’s profit margin narrowed from 14.9 percent to 12.4 percent due to the markdowns. The company also reiterated its full-year sales profit forecasts.

“There has been some talk of a general retail bounce in July and while Next did enjoy very strong sales in July, this was driven by a much larger end-of-season sale,” chief executive officer Simon Wolfson said in the statement. “It has been a challenging year so far, with economic and cyclical factors working against us, and it looks set to remain that way until mid-October at the earliest.”

Like Marks & Spencer Group Plc and Primark, Next has had to contend with weaker demand this year amid a growing tendency among Britons to spend on leisure activities rather than apparel. The outlook is complicated by the plunge in sterling following the UK’s decision to leave the European Union. A weaker pound increases the costs of sourcing merchandise from Asia – which is priced in dollars – and Next has said it will offset that by raising prices.

Full-price sales under the Next brand declined 0.3 percent in the period, the company said.

By Sam Chambers; Editors: Matthew Boyle and Paul Jarvis