Next raises its profit guidance for second time

Next expects pre-tax profit for current financial year to hit £720m

Next (LON:NXT), the UK fashion outlet, increased its full-year profit guidance as it announced better than anticipated Q1 trading.

The FSTE 100 group, which has around 500 shops, in addition to an online presence, confirmed its central guidance for profit before tax in the 2021/2022 fiscal year is now at £720m, £20m more than what was forecast in April.

The news comes despite full price sales in the quarter to May 1 dropped by 1.5% compared to a year prior, before the coronavirus pandemic impacted its trading levels.

Next’s previous guidance anticipated Q1 sales falling by 10% for the same period in the 2019/20 financial year, however, it beat the forecast by £75m.

The group did show strength during the pandemic, thanks to its online sales, while some of its rivals, including Primark, have fared less well.

Next said first quarter retail sales from its stores were down 76% on two years ago, reflecting COVID-19 lockdowns, while online sales increased 65%.

Total full price sales in the last three weeks were up 19%, reflecting the recent easing of pandemic restrictions.

“Evidence from last year suggests that this post lockdown surge will be short lived, and we expect sales to settle back down to our guidance levels within the next few weeks,” it said.