Next has reported a ‘better than expected’ festive trading period and, as a result, has upped its full year profit guidance.
The buoyant retailer saw sales grow 5.7% in the nine weeks to 30 December 2023, having initially predicted a 2% increase for the period.
On the back of the strong performance and, as it is also expecting a robust performance in January, Next has increased its full year profit before tax guidance by £20 million to £905 million. This is up 4% versus last year, TheIndustry.Fashion reported.
Of the £20m, £17m came from the sales beat to date and £3m from an upgraded forecast for full price sales in January.
The retailer’s online business performed particularly well – in the final quarter of the year, online sales rose 9.1%, with retail up 0.6%; over the second half of the year, online was up 7.7%, while retail was flat.
Overall sales were up 5.7% in the final quarter and 4.8% in the second half.
Looking ahead Next said it now expected full year full price sales to reach £4.8 billion (+4%), with full tax profit before tax for the full year now expected to hit £905 million (+4%).
On the face of it, Next said that the consumer environment ‘looks more benign than it has for a number of years’, outlining positive factors such as wages rising fast than prices and zero inflation in its selling prices.
However, it also highlighted risk factors such as a potential weakening employment market and fixed rate mortgage deals continuing to come to an end.
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