Next raises profit guidance for fifth time in 10 months

British clothing retailer Next on Thursday beat guidance for sales in the run-up to Christmas and raised its full-year profit outlook for a fifth time in ten months.

Next, which trades from about 500 stores and online, said full-price sales rose 20 per cent in the eight weeks to December 25th versus the same period in its 2019-20 year, before the pandemic impacted trading. That compares to guidance of a rise of 10.2 per cent.

Next, the first major British retailer to update on Christmas trading, said a strong online performance more than offset another fall in store sales.

Retail in the UK and Ireland showed a decline of 5.4 per cent in the fourth quarter of the year compared with pre-pandemic figures, and 24 per cent lower for the year. Total online sales were up 45 per cent in the fourth quarter and 49 per cent for the year.

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Next forecast a full-year 2021-22 pretax profit of £822 million (€1.55 billion) up from the £800 million previously guided and up 9.8 per cent versus 2019-20.

Next has proved a resilient performer during the pandemic, benefiting from its long-established online operations.

Rivals with weaker or no online business, notably Primark , have seen large falls in sales. Others, such as Topshop-owner Arcadia, and Debenhams went bust.

Next said its initial guidance for the 2022-23 year is for full price sales to be up 7 per cent versus the current 2021-22 year ending January 2022. It estimated that pretax profit will be up 4.6 per cent at £860 million.

Next also declared a further special dividend of 160 pence per share to be paid at the end of January and said it intends to return to its pre-pandemic dividend cycle in the 2022-23 year. – Reuters