Next raises full-year profit guidance after strong first quarter

The retailer said that for the 13 weeks to May 1, full-price sales were down just 1.5% compared with two years ago. Next said it had budgeted for sales to be down 10% on pre-pandemic levels and it has beaten that first-quarter forecast by £75m. 

As a result of this stronger than expected result in the first quarter, Next said it had increased its profit guidance for the year by £20m to £720m.

Next said it had not upgraded its sales forecast for the year, which remained at 3% above full-year sales in 2019. 

By channel, online was by far the strongest for the period, with sales up 65%. The brand’s UK and ROI stores, which were closed for much of the period due to coronavirus restrictions, reported that sales were down 75%. 

Next said the strong sales growth reported in stores in the three weeks since April 12, when they were allowed to reopen, was due to “pent-up demand” and “is very unlikely to be indicative of demand for the rest of the year”.

The retailer said that its better than expected performance for the period was driven by strong trading across its homeware and childrenswear categories and through its third-party marketplace, with core adult fashion sales still lagging.

Next said it is still expecting to finish the year with online sales up 24% and retail store sales down by 20%, with consumer behaviour settling “back to our guidance levels” after an initial “post lockdown surge”.