Next upgrades full year profit forecast
Next has upgraded its full year profit forecast after sales were boosted by the arrival of warm weather and continued salary increases for UK workers.
In an unscheduled trading update, the fashion and homewares retailer said trading in recent weeks had been materially better than the guidance it issued in May.
Its full price sales increased by 9.3% on the corresponding period last year compared to a predicted 5% decline. This meant that the retailer beat its full price sales estimates by £93 million.
As a result, Next has upgraded its full price sales forecast for its current financial year by £137 million. Meanwhile, pre-tax profit for the year is now expected to be £835 million, which is £40 million higher than the retailer’s previous guidance.
Next explained: “If recent pay rises and the sudden change in weather have indeed contributed to the current over-performance, then it is reasonable to expect that the effect will diminish over time because ongoing inflation will slowly erode the positive effect of annual pay increases.
“This is why we are not anticipating the current performance to continue at the same level going forward, albeit we have moderately improved our guidance for the rest of the year.”
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