Next upgrades full-year profit guidance
Next has announced that its third quarter full price sales have been better than expected and increased by 2.8% compared to last year. Total sales, including markdowns, rose by 1.4%.
As a result, the fashion and homewares retailer has raised its full year pre-tax profit guidance to £365 million, which is £65 million higher than the central guidance it gave in September.
However, the retailer said: “There remains a very high degree of uncertainty in our estimates and much will depend on the progress of the pandemic, along with the Government and consumer reaction to developments.”
While online sales climbed by 23.1% in the quarter, sales at Next’s retail stores dropped by 17.9%. Markdown sales declined by 12.3% year-on-year due to lower in-store footfall and capacity constraints at the retailer’s online warehouses.
Next said its category performance in the period was very similar to the second quarter, with home and childrenswear performing well and formal and occasion wear remaining weak. It also said that shops in retail parks had better sales than those in shopping centres and high streets.
Looking ahead, Next said if England, Scotland and Northern Ireland followed Wales’ decision to shut non-essential retail shops, a two week lockdown in November would reduce its retail full price sales by around £57 million depending on the timing. This would represent 17% of its retail full price sales and 6% of full price sales in the quarter.
However, Next said it had found no evidence of Covid-19 being transmitted in its stores or was aware of any studies suggesting that clothing and homeware retail presented a significant risk of infection.
