Next ups full-year guidance again after bumper Christmas

No comments

Fashion giant Next has increased its full-year profit guidance again after enjoying a bumper Christmas trading period.

Next Christmas fascia

In the eight weeks to December 25, Next’s full-price sales were up 20% compared with the same period pre-pandemic – £70m ahead of its previous sales guidance.

The retailer said it had increased full-year profit before tax guidance by £22m to £822m – up 9.8% versus two years ago. For the period, total online sales were up 45% compared with pre-pandemic levels

As a result of another strong Christmas trading period, Next estimated that its profit before tax for the end of the year will be up 4.6% at £860m.

The retailer said it had expected its fourth-quarter sales to be weaker than in the third quarter, but it enjoyed “a strong revival” in branded adult formal and occasionwear during the period.

Next said that in the run-up to Christmas stock levels had been “materially lower than planned” and it had “also experienced some degradation in delivery service levels as a result of labour shortfalls in warehousing and distribution networks”.

Alongside its increased full-year profits, Next said it expects full-year sales to be £4.3bn – a 12.8% increase on previous estimates.

In terms of the year ahead, the retailer said it did not anticipate any further disruption to its business from Covid-19, but that it faced “five areas of uncertainty in the wider economic environment”.

Next also flagged that it had revised its estimates for selling price inflation “as a result of the unanticipated persistence of higher freight rates into the back end of the year ahead, along with some further increases in manufacturing costs”.

Alongside increased freight and manufacturing costs, Next said it was also experiencing UK wage inflation by as much as 5.4%.