“Very strong” online growth has helped sales at fashion retailer Next to outperform expectations.
Growth of 14.8% in its Directory division, which sells online and through mail order, helped push total Next brand sales up by 5.2% in the first quarter of its financial year, the company headed by Lord Wolfson (pictured) said in an interim management statement released today. That was higher than the guidance previously given by the company, ranging from a 0.5% decline to 2.5% growth in sales.
Retail sales rose by 0.9% during the period, the 13 weeks to April 30.
The growth in Directory sales was driven by an improved delivery service, more aggressive marketing and better stock availability.
The company warned, however, that the “overperformance” was unlikely to be maintained, with at least 2.5% of extra turnover following “exceptionally warm weather over Easter and spending in anticipation of the Royal Wedding Bank Holiday.”
That had brought forward summer purchases, it said, adding: “We do not expect the current level of growth to continue into the second quarter.”
First-half Next brand sales were expected to show growth of between 1.5% and 4%, giving a pre-tax profit range of £535m to £585m, ahead of market expectations.
The company said: “Despite the strength in recent sales we remain cautious for the full year given there has not been a significant change in the underlying economic environment.” It warned that cuts and inflation in commodities would slow consumer spending, while it was also likely to increase its own selling prices by 8% in the second half of the year.
