Next has upped its full-year profit guidance again after delivering “much better” sales over the Christmas period than expected in previous guidance.
The fashion retailer said its full-year pre-tax profit was now expected to be £370m, up from the £365m forecast in October, and at the top-end of the “upside” scenario Next mapped out at its interim results in September.
This uplift in profit guidance comes as the retailer delivered a 1.1% decline in full-price sales in the nine weeks to December 26 year on year, far ahead of the 8% fall in festive sales forecast in October.
Next said “the sales gained in our online business compensated for almost all those lost in retail stores” over the festive period, with product full-price sales down just 0.5% year on year. Excluding VAT, online sales rose 38% overall during the period, while retail sales fell 43%.
Childrenswear, loungewear and home products were strong sellers for Next over Christmas, while clothing for work and socialising performed poorly.
A returns rate of 21% over Christmas compared with 36% the previous year, which the retailer credited to the shift in products that were popular in the run-up to Christmas and shoppers being more selective when placing their initial orders.
Although stores were closed for much of the period covered in Next’s Christmas trading update, the company stressed that retail parks were its strongest performing bricks-and-mortar format, with sales up 15% compared to shopping centre and city-centres locations.
Next said that it did not expect Brexit to impact its ability to export and import stock or lead to increased custom duty costs in the year ahead.
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