Next full price sales better than expected
Next saw its full price sales come in better that expected in its second quarter with a drop of 28% on last year.
The fashion and homewares retailer said store sales had been more robust than anticipated during the Covid-19 pandemic, which meant sales in the three months to 25 July were significantly ahead of its internal plan.
Some product categories did better than others with childrenswear, home, nightwear and sportswear outperforming clothing associated with work, going out, overseas holidays and big social events.
Online sales rose by 9% in the quarter after trading was boosted by the retailer’s online warehouse picking and despatch capacity returning to normal levels faster than expected.
Meanwhile, retail sales were down 72%. Retail like-for-like sales after the re-opening of stores fell by 32%.
Looking ahead to the results of its full year, Next said it has modelled three new scenarios based on full price sales being down 18%, 26% and 33%. The company said a decline of 26% will be in line with its internal forecast and assumes that sales in the second half fall by 19%.
The company now estimates that full year pre-tax profit will come in at £195 million.
Next said: “There is still much that remains uncertain and our central scenario cannot be accorded the same degree of confidence that our guidance would normally receive at this time of year. The duration of social distancing rules, post-lockdown consumer behaviour, earnings, unemployment, and, most importantly, whether there will be a second wave lockdown, all remain unknowable.
“Nonetheless, our experience over the last 13 weeks has given us much greater clarity on our Online capabilities during lockdown and the state of consumer demand, and we are now more optimistic about the outlook for the full year than we were at the height of the pandemic.”
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