Next urges caution for the year ahead

5th January 2023 | Jack Oliver

Next has released its trading statement for the Christmas period, revealing better than expected sales, but warns of a high level of uncertainty for the year ahead.

In the nine weeks to December 30 Next recorded that full price sales were up 4.8% compared to 2021, around £66m better than their previous guidance of -2% for the period.

They have now revised their full year profit before tax guidance by £20m up to £860m, an increase of 4.5% on last year.

Next said that both online and retail sales exceeded expectations, with retail having a particularly strong showing. It suggested that the business underestimated the negative impact COVID had on sales the previous year. The improved stock levels as a result of less supply train disruption also produced a surprising improvement on sales, said Next.

However Next maintains a cautious outlook for the year ahead, forecasting that full price sales for the year ending January 2024 will be down 1.5% against the current year.

Next cited inflation in essential goods, including energy, rising mortgage costs and inflation in its own product prices as reasons for its cautious outlook.

The retailer added that it expects employment to remain strong so does not anticipate a collapse in demand or an increase in bad debt above its current provisions.

Next estimates the cost for its goods to peak around 8% in the spring/summer season, but expects this to fall to no more than 6% in the second half of the year.


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