Next bets on UK consumers spending as shares soar

Next had cautioned in January that sales growth would likely moderate if disruption to shipments through the Suez Canal, due to attacks by Iran-aligned Yemeni Houthi militants in the Red Sea, continued through 2024.

Prospects for Britain's consumers are the brightest since before the pandemic, clothing retailer Next said, helping its shares to a record high after it posted a 5% rise in annual profits and kept its guidance for the current year.

"We're not negative about the consumer outlook, it's a first for us for some time," chief executive Simon Wolfson said.

Positives included wages rising faster than prices and zero inflation in the group's own products, he said.

Risk factors were a weakening jobs market and consumers having to renegotiate mortgages at higher rates.

Shares in Next, whose stores on major shopping streets across the UK make it a bellwether of the country's consumer confidence, were up 4.7% in morning trade, extending gains over the last year to 30.8%.

Next had cautioned in January that sales growth would likely moderate if disruption to shipments through the Suez Canal, due to attacks by Iran-aligned Yemeni Houthi militants in the Red Sea, continued through 2024.

But on Thursday it said it did not expect a major hit.

Although average transit times had risen by seven to 10 days, the company said its product teams had adjusted contract bookings to account for the delay.

— Reuters