Next has delivered healthy growth in sales and pre-tax profits, but warned strong comparables in the first half would result in a decline in both metrics next year.
The fashion giant delivered a 5.7% boost in its pre-tax profits to £870m, a £10m increase on its previous guidance of £860m, for the year ending January 2022.
Total sales increased to £5.14bn during the period, an 8.4% jump on last year and a 20.6% increase on a three-year basis.
Next maintained its guidance for sales and profit but said it was budgeting for sales to be down 1.5% versus last year and its pre-tax profits to reduce to £795m.
The retailer said it was expecting a weaker performance in the first half of 2023 because the same period last year coincided with unusually warm weather and pent-up demand for summer events. While the forecast was unbalanced on 2022’s results, it was expecting a performance in line with a “more normal year” such as 2019.
However, Next expects selling price inflation to be more benign than expected, with like-for-like price inflation across spring and summer down from 8% to 7% and over autumn and winter down from 6% to 3%.
Next’s online sales were slightly down after huge growth the previous year, down 2% to £3bn, and it expects to add new websites for Jojo Maman Bébé in May and Made.com in July, while Joules will launch in April 2024.
The company has also appointed Jeremy Stakol to its board from next month as group investments, acquisitions and third-party brands director.
Stakol has been managing director of Lipsy since 2004 and has “successfully led many of the new investment transactions and related total platform opportunities”, Next said.
Next chair Michael Roney said: “It has been a good year for Next. We have embraced the various challenges and seized the opportunies that have arisen.
“We have prepared and budgeted for a difficult year. We are very clear on our priorities. If we continue to improve our product ranges, relentlessly manage our costs and upgrade our customer service, while also developing new business opportunies, we can lay the foundations for an exceptionally strong business and still deliver healthy profits, cash flow and dividends.
“Our performance, as ever, is a result of the hard work and dedication of the Next team. I would like to thank my colleagues across the group for all of their effort, talent and dedication.”
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