Next Raises Earnings Expectations After A Strong Season

UK company Next renews profit forecast for fifth time after strong Christmas sales

British fashion company Next has raised its annual profit forecast for the fifth time in 10 months after beating sales guidance in the run-up to Christmas, helped by an unexpected boom in demand for adult formal wear.

As the first major UK apparel retailer to renew its post-Christmas sales target, Next has significantly raised the bar by announcing a 20% jump in sales at full prices during the eight-week period to December 25 compared to pre-pandemic levels in 2019 during the same period. , raising guidance by 10.2%, and Internet sales in Next rose 45% during the eight-week period, strongly offsetting the 5.4% decline in sales in Britain and Ireland.

But Next warned of the pressures consumers face such as rising food prices, energy costs, mortgage rates and taxes, pointing to a difficult business environment in 2022, and also indicated that its prices will rise by 3.7% during the first half of 2022 and by 6% during the second half due to the rise in shipping and manufacturing costs.

The company’s shares traded down 1.4% to maintain a gain of 5% year on year.

Next expects sales growth in the fourth quarter to be weaker than the third, and sees 2021-2022 earnings before tax at £822 million (€1.1 billion), up from the £800 million previously set by the company and a growth of 9.8% over 2019-20 levels.

For the year ending January 2023, NeXT expects sales to grow at full prices by 7% compared to the current year to January 2022, with earnings before tax increasing by 4.6% to reach £860 million.

Next also revealed a special dividend campaign for shareholders equal to 160 pence per share, with a total value of £ 205 million to be paid at the end of January, and added that it is seeking to return to the dividend cycle it was in before the pandemic during 2022-2023.

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