NEXT plc (LON:NXT)’s total group sales rose 7.6% to £2.2bn compared to 2019. That was entirely driven by online sales. Pre-tax profits were up 5.9%, reaching £346.7m.
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Full price sales in the first eight weeks of the second half were up 20% on 2019, compared to second-half guidance of 6% growth. As a result, Next is upgrading guidance for the fourth time this year. It expects full price sales to rise 10% for the full year, while pre-tax profits guidance has also been upped by £36m to £800m.
The shares rose 2.6% following the announcement.
NEXT: The Golden Girl Of The High Street
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown:
“Next is the golden girl of the high street. Its well-groomed and ever-growing online business means it has brushed off the worst of the woes brought on by lockdown. The group is also leveraging its superior online platform to help other retailers boost their own digital performance. This is a lower-risk and high return area of business, which could translate into an impressive long-term source of growth.
The high street star hasn’t escaped unscathed by the labour, supply and cost issues sweeping across the country. While things are stable for now, a lack of foreign workers means some Christmas deliveries might take longer to arrive during the peak trading season. Next also expects fashion prices to increase by 1%, with homewares rising by as much as 6% in the first half of next year. This is all largely outside Next’s control and given these issues are affecting so many businesses, customers are unlikely to punish Next too much. The challenge will be making sure disruption and price hikes are managed as well as possible to limit unnecessary and avoidable customer backlash. Next’s considerable presence in more popular out-of-town retail parks should also continue to help it perform better than peers, as more shoppers spruce up their wardrobe for office and social events, in the run up to Christmas.”
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