Next full price sales shine as warm weather boosts formal wear sector

Next shares rose 2.3% to 6,906p in early morning trading after the FTSE 100 fashion group announced a Q2 full price sales climb of 5% as warm weather and social events sparked a resurgence in its formal wear business.

Next suspected its strong sales were also linked to the closure of several competing brands over the last three years, which was supported by the ONS statistic that overall money spent on clothing declined 6% compared to pre-pandemic levels.

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The retailer highlighted a 12% climb in retail sales, with broadly flat online sales.

“Next isn’t immune to the cocktail of headwinds facing UK retailers, but it tends to be better at managing them than most. These results are no exception,” said Wealth Club head of equities Charlie Huggins.

“Next is no longer just a UK fashion retailer selling its own products. It’s broadened out into Homewares and Beauty and is selling more third-party brands through its website than ever before, both in the UK and internationally. This is helping to keep it relevant while opening new avenues for growth.”

FY 2022 guidance

The fashion company reported an increase in FY 2022 profit guidance of £10 million to £860 million, reflecting a rise of 4.5% compared to last year.

Next maintained its full price sales guidance for HY2 of a 1% growth, and noted an EPS guidance increase of 7.2%.

“Make no mistake – if the consumer catches a cold, Next will feel it. But it’s unlikely investors will lose their shirt, given the resilience of its business model,” said Huggins.

“Meanwhile, the long-term growth prospects for the business are looking better than they have done for quite some time.”

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