Next has upgraded its full year profit guidance
Next has upgraded its full year profit guidance after it saw a significant improvement in sales of occasion wear in the lead up to Christmas.
In the eight weeks to 25 December, total full price sales were better than expected with an uplift of 20% against the same period prior to the pandemic two years ago. This was £70 million ahead of guidance. As a result, the retailer’s surplus stock was much lower than expected, and stock for the end-of-season sale was down 18% on 2019.
Next said: “We were expecting sales growth in Q4 to be weaker than Q3, however, a strong revival in Next branded adult formal and occasion wear significantly improved sales throughout the final period.
“In the run up to Christmas our stock levels were materially lower than planned. We also experienced some degradation in delivery service levels as a result of labour shortfalls in warehousing and distribution networks. The fact that our sales remained so robust in these circumstances is, we believe, testament to the strength of underlying consumer demand in the period.”
For the current financial year Next has increased its pre-tax profit guidance by £22 million to £822 million. However, the company has warned of higher prices in the new financial year with year-on-year rises of 3.7% for spring/summer clothing and homeware ranges and 6% for autumn/winter products.
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