Next raises profit forecast after strong Christmas sales
Next has reported strong sales in the run-up to Christmas and, as a result, has raised its profit forecast for the financial year ending 25 January.
In a trading statement issued today, the retailer said total sales rose by 11.9% between 1 November and 24 December. At Next’s high street stores sales increased by 7.7% while Next Directory sales, which includes online and catalogue sales, surged by 21%.
Next also revealed that its total stock for its end of season sale was down 11.5% on last year and that it now expects its final clearance rates to be marginally ahead of last year.
The retailer attributed the step-up in Christmas trading to improvements in its seasonal knitwear, nightwear and gift offer. In addition, increased confidence in online deliveries meant that more customers this year continued to order products from Next Directory right up to the weekend before Christmas.
Never Miss a Retail Update!Due to sales in the fourth quarter being “significantly ahead of expectations”, Next said it had raised its profit forecast range to between £684 million to £700 million.
However, the retailer was cautious about the outlook for the year ahead and said: “The problem of little or no growth in real earnings looks set to persist for some time, and we cannot see any reason to expect a significant increase in total consumer spending in the year ahead.
“We are also wary that any return to significant economic growth is likely to result in rising interest rates which, in turn, is likely to moderate spending of those with mortgages.”
The retailer added that its budgets for the year ahead were based on growth in Next brand sales of between 3% and 7% and that it expects profit before tax to be up broadly in line with sales.
