Next has reported slightly better than expected sales for the first three months of the year with revenue for product sold at full price slipping by just 0.7 per cent as against the 2 per cent it had previously advised the market to expect. It is however sticking to its sales and profit guidance for the full year which it says will see a 1.5 per cent drop in sales and pre-tax profits of £795 million.
In its trading update Next said: “Although our first quarter performance moderately exceeded our sales guidance, we believe it is too early in the year to alter our overall sales expectations for either the half or the full year.
“To maintain our first half forecast, we have moderated our sales forecast for the second quarter, which is now planned to be minus-5 per cent down on last year.
“This adjustment seems reasonable, as some of the quarter’s success, particularly in holiday clothing sales leading up to Easter, might have been pulled forward from the second quarter.
“Shareholders might wonder why we are so cautious for sales in Q2. As we explained in March, the second quarter last year benefited from unusually warm weather and pent-up demand for events such as weddings, proms etc.”
It did say that supply chain issues had eased and that the resulting lower shipping costs have enabled it to ‘contain’ essential price increases but that these were up by seven per cent for Spring/Summer but would drop to around 3 per cent for autumn/winter.