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Next raises profit guidance thanks to annual pay rises and warmer weather

Next has reported a 9.3% rise in full-price sales over the past seven weeks, thanks to continued pay rises and warmer weather in the UK.

Compared with a declining prediction of 5%, the retail giant claimed that trading has been “materially better” in the period.

As a result, it has now upgraded its sales guidance for the year by £137 million and raised its full-year profit expectations by £40 million to £835 million.

Next has been ranked as an Elite retailer in the 2023 RXUK Top500 report, click here to download.

The omnichannel retailer also revealed it has surpassed its predicted full-price sales by around £93 million.

“If recent pay rises and the sudden change in weather have indeed contributed to the current
over-performance, then it is reasonable to expect that the effect will diminish over time because
ongoing inflation will slowly erode the positive effect of annual pay increases,” Next said in a statement.

“This is why we are not anticipating the current performance to continue at the same level going forward, albeit we have moderately improved our guidance for the rest of the year.”

The news follows reports that the retail giant is considering the sale of its 51% stake in Reiss, in a deal worth over £500 million.

According to reports, Next is said to be working with investment bankers at Raymond James to arrange the sale.

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