Fashion retailer Next smashes sales forecast, upgrades profit guidance

Company said sales had risen by 19% in last 11 weeks


British fashion retailer Next said it had soundly beaten its expectations for full-price sales, with a rise of 19 per cent in the last 11 weeks compared with two years ago and, as a result, it was increasing its profit guidance.

This included a 21 per cent jump in full-price sales from its stores in the Republic.

The company, which had assumed its sales would rise by about 3 per cent, increased its central guidance for full-year profit before tax by £30 million (€34.8 million) to £750 million. It put the sales surge down to a combination of pent-up demand for adult clothing, the onset of warm weather at the end of May and start of June, and an increase in spending from fewer holidays abroad and consumers’ savings acquired in lockdown.

The company, which has a track record of beating guidance, said it expected sales for the second half of year to January 2022 to rise by 6 per cent rather than 3 per cent.

The increase in profit guidance would have been higher had it not decided to repay £29 million of business rates relief, accounting for the time its shops were open. It said it had taken the decision after consulting major shareholders.

Next, which has a well-established online operation and a 500-strong store network in Britain and Ireland, said its surplus cash for the year was forecast to be £240 million, which it planned to give to shareholders via special dividends, the first of which would be paid in September. – Reuters