Next Plc has seen a 2.8 per cent boost in sales for the third quarter of 2020 in comparison with last year.
However, despite full-price sales over the period which were “better than expected”, today’s update revealed that year to date sales are down 20.5 per cent compared with 2019.
The retailer has forecasted its full year profit before tax at £365m. This is £65m higher than the scenario given in September. Year end net debt is predicted to fall by £487m to £625m, which Next says is “comfortably within the Company’s cash resources of £1.6bn”.
And, Next has continued to see a boost in online sales during the last three months, up 23.1 per cent in comparison to the same period last year, and up 1.0% on year to date sales. However, retail sales for Q3 fell by 17.9 per cent, and by 47 per cent for the year to date.
But, Next says there remains “a very high degree of uncertainty” due to the pandemic. The retailer cites uncertainty over a further national lockdown as “the biggest single unknown”, which could reduce retail full price sales by around £57m.
Next notes that its cash flow forecast has increased by £25m, which is £40m less than its increase in profit forecast. This is mainly as a result of a £30m acceleration in warehouse capital expenditure, Next says.
And, on Brexit, Next said a no-deal would not be the company’s “preferred outcome”. However, the retailer said that it is “well prepared” for this scenario.
“As long as our ports continue to operate effectively, we do not believe that a no-deal Brexit poses a material threat to the ongoing operations or profitability of the Group,” Next says.
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