Next ups profit guidance by £20m
Next has upped its pre-tax profit guidance for the full year by £20m, after its November and December trading was better than expected.
The retailer now expects to make a profit before tax of £905m for the full financial year, up 4% against last year.
The increase of £20m consists of £17m coming from the sales beat to date with a further £3m from an upgraded forecast for full price sales in January.
In September, the retailer upgraded its profit guidance for the third time in the year, as it continued to outperform its own expectations.
This comes as Next releases a trading statement for the fourth quarter (ending 30 December), during which performance in both its online and retail departments were ahead of expectations. Online sales were up by 9.1% during the fourth quarter compared to 2022, and ahead by 7.7% for the second half of the year. Retail sales were up by 0.6% and were unchanged in the fourth quarter and the second half respectively.
Next also said its cash generation had remained strong in the year, and anticipates that it will generate around £100m more surplus cash than the previous guidance it had given in September.
For the next financial year, the retailer expects its full price sales to increase by 2.5%, with total group sales including subsidiary companies to increase by 6%. For the full year, Next expects to record a pre-tax profit of £960m.
Despite noting positive trends including wages rising faster than prices, the retailer also warned of supply chain risks in the Suez Canal which could cause delays to stock delivery in the early part of this year.