Next has announced that it has increased its profit guidance for the full year by +£20m to £980m, up +6.7 per cent compared to last year. This is partly due to second quarter full-price sales increasing by 3.2 per cent compared to the previous year, exceeding expectations by £42m.
In a statement, Next said: “The weather last summer was exceptionally favourable for clothing retailers, so we had planned for full-price sales to be down -0.3 per cent in the second quarter this year. Our full-price sales in the UK (Online and Retail combined) were only slightly ahead of our expectations, up +0.4 per cent; overseas sales online were much better than expected, up +21.9 per cent.
Group sales, which includes sales in our subsidiaries, were up +8.0 per cent in the first half. The additional growth in Group sales came from the acquisition of FatFace and an increase in our shareholding in Reiss, both of which occurred in Q3 last year”.
Commenting on Next’s trading statement, Julie Palmer, Partner at Begbies Traynor said: “True to form, Next has once again beaten its own expectations to deliver a healthy 3.2 per cent increase in sales, compared to the -0.3 per cent drop the retailer had anticipated.
“As expected, Next has experienced softer trading in the UK, with sales up just 0.4 per cent, driven by the recent wet weather that has dampened trading across the sector. However, this slowdown should not ring alarm bells for the market as the FTSE 100 stalwart still looks in great shape at a time when many smaller peers are struggling.
“Looking ahead, Next will be hoping the warmer weather continues and that interest rate cuts are on the horizon. Fortunately, the retailer has an impressive track record of resilience and adaptability, putting it in prime position for a rebound in consumer spending.”
Next will release its interim half-year results in mid-September.
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