Next has described sales in November and December as “better than anticipated”, with its latest trading statement for the nine weeks to 30 December showing full price sales were up 5.7% versus last year – £38mn better than its previous guidance of 2.0% for the period.
The high street giant has therefore increased its full year profit before tax guidance by £20mn to £905mn, up 4.0% versus last year. Of the £20mn increase, £17mn came from the sales beat to date and £3mn comes from an upgraded forecast for full price sales in January.
Online sales increased 9.1% during the golden quarter and up 7.7% for the half-year, while store purchases edged up 0.6% over the period but remained flat on a half-year basis.
Richard Lim, CEO at Retail Economics, commented: “These figures are astonishingly strong and they will set them apart from the competition. There’s a gap emerging between those retailers who have invested heavily in their digital proposition over the last decade with those who have not and Next is leading the pack.
“Their online sales were the driving force this Christmas but it was only made possible with the evolving value of their stores. Click and collect, showcasing products in shops, and returns to stores are all critical requirements for an increasing number of consumers.
“Their clever acquisitions over the last few years are also beginning to reap rewards”.
Furthermore, Next has pledged ‘no price rises’ this year. Following its factory costs stabilising for the first time in three years, the retailer said there would be “zero inflation in our selling prices”.
Russell Pointon, director of consumer and media at Edison Group, added: “Next has set the bar high for the rest of the retail sector by posting a strong trading update this morning.
“The company points to a more benign outlook for the consumer than there has been for a while with better wage growth and zero sales price inflation. However, the company is also alert to the risks from a weakening employment market, higher mortgage rates, and difficulties in the Red Sea which may affect the company’s supply chain – not least because some of its product is manufactured in Asia.”
Our editor carefully curates a daily newsletter filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter sent straight to your inbox and why not follow us on LinkedIn to receive the latest updates on our research and analysis.