Fashion and homewares retailer Next has reported better than expected sales during the Christmas period and has increased its profit guidance.
According to its latest trading update in the nine weeks to 30 December 2022, full price sales were up +4.8% versus last year. “This was c.£66m better than our previous guidance of -2.0% for the period,” Next said.
Online sales during the period rose 0.2%, while instore retail sales rose 12.5%. Next said it believes that the strength of demand for cold weather products in December was partly a result of pent-up demand from an unusually warm October and November.
“Both Online and Retail exceeded our full price sales expectations, with Retail being particularly strong. We think that we underestimated the negative effect COVID was having on our Retail sales last year. We may have also underestimated the effect improved stock levels would have on both businesses (stock levels were exceptionally low last year as a result of widespread supply chain disruption).
“We have increased our full year profit before tax guidance by £20m to £860m, up +4.5% versus last year. Based on this profit guidance, Earnings Per Share (EPS) would be 567.2p, up +6.9% versus last year. We remain cautious in our outlook for the year ahead. Initial guidance for the year ending January 2024 is for full price sales to be down -1.5% and profit before tax to be £795m, down -7.6% versus the current year.”