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Next raises full year profit guidance

Next has increased its guidance for full year pre-tax profit by £20 million to £720 million following better than expected first quarter trading. In a statement,… View Article

GENERAL MERCHANDISE

Next raises full year profit guidance

Next has increased its guidance for full year pre-tax profit by £20 million to £720 million following better than expected first quarter trading.

In a statement, the fashion and homewares retailer said full price sales in the thirteen weeks to 1 May  were down 1.5% on two years ago, which was better than the 10% decline it had previously predicted. This means the company has beaten its first quarter forecast by £75 million.

Next said: “Overall full price product sales (excluding interest income) were only down 0.6% despite the ten-week closure of our retail stores.  The number makes it appear as if almost all the sales we lost in stores were simply transferred online.  This was not the case.  In fact, very few of the retail sales lost on adult clothing were recovered online.

“In reality, it was the growth in online sales of Next Homeware, third-party brands (through Label) and Next childrenswear, along with increasing sales overseas, that served to make up for the sales we lost in our stores.”

Giving an update on post-lockdown trading, the company said sales in the last three weeks have been exceptionally strong with full price sales up 19% on two years ago. While like-for-like sales in stores rose by 2%, online sales climbed by 52% in the period.

However, Next has not raised its sales guidance for the rest of the year, which remains at growth of 3% against two years ago.

Next added: “Evidence from last year suggests that this post lockdown surge will be short lived, and we expect sales to settle back down to our guidance levels within the next few weeks.  We are therefore maintaining our sales guidance for full price sales for the rest of the year to be up 3% versus 2019.”

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