Next raises full year profit guidance
Next has raised its profit guidance for its 2021/22 financial year despite posting a slump in both sales and profit for the previous year due to the coronavirus pandemic.
In its results for the 12 months to January 2021, the retailer said its pre-tax profit declined to £342 million from £728.5 million in the prior year.
Meanwhile, total sales fell by 17% to £3.6 billion with almost all of the reduction coming in the first half. In the second half, lost sales from retail stores were almost entirely offset by sales gained online. Next said it expects the shift in consumer behaviour towards online shopping to continue for some time, so has been investing heavily in its web platform.
The retailer has now raised its profit guidance for the year to January 2022 to £700 million from a previous £670 million as it reported that online sales have been better than expected in the first eight weeks of the new financial year.
Looking ahead, Next chief executive Lord Wolfson said: “It is hard to think of a year where the outlook has been so uncertain. The health of the consumer economy, the future course of the pandemic and the prospects for retail stores remain unknown. It also remains to be seen how many of the product preferences and shopping trends induced by the pandemic will persist once life returns to normal.
“Our best guess is that the consumer economy, at least in the short term, will be healthier than many presume. It seems likely that a combination of pent-up demand along with a healthy overall increase in personal savings will serve to keep the consumer economy moving forward.”
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