Sales surge as fashion giant Next smash forecasts
Sales at Next stores jumped 19% over the 11 weeks compared with the same period two years ago
Fashion retailer Next lifted its profit forecast after pent-up demand for adult clothes and warm weather helped it smash sales forecasts for the last 11 weeks.
The mainstay of UK and Ireland's shopping streets said full-price sales jumped 19% over the 11 weeks compared with the same period two years ago, before the disruptions of the pandemic, far above its forecast for 3%.
The company said pretax profit for the year to January 2022 would be about £750m (€867m) under its central guidance. Shares in Next rose 10% in early trade, taking gains in the last 12 months to 60%.
The figures cover sales for both the UK and Ireland.
It put the sales surge down to a combination of pent-up demand for adult clothes after 18 months of pandemic restrictions, warmer weather at the end of May and start of June, and an increase in spending as shoppers take fewer holidays abroad and dip into savings built up in lockdowns.
Sales of goods both in stores and online combined in the UK increased by 16% in the second quarter while retail store sales in Ireland were up slightly by 1% for the second quarter, part of which saw retail still under lockdown.
Next, which runs the online Directory business alongside its stores, said it did not expect sales to remain at an exceptionally strong level, but it was optimistic about the second half, when it sees sales up 6% on levels two years ago.
The increase in profit guidance would have been higher had it not decided to repay £29m of business rates relief, accounting for the time its shops were open. It said it had taken the decision after consulting major shareholders.
Next forecast surplus cash for the year to be £240m, which it plans to give to shareholders via special dividends. It will pay the first - valued at 110 pence a share - in September.
Reuters
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