Next reports positive Christmas results
Next has announced over-forecast results for the Christmas trading period, despite a sales drop across its retail stores. For the quarter ending December 29, the fashion retailer reported a one per cent rise in product full-price sales.
It generated a 15.2 per cent surge in online sales, against a store sales drop of 9.2 per cent, against the 13 per cent decline which had been predicted by retail sector analysts.
Next commented: “Strong sales in the three weeks prior to Christmas along with a good half-term holiday week at the end of October made up for disappointing sales in November.”
For its full year the business said it expected a 2.6 rise in product full-price sales, or a 3.2 per cent rise on a total full-price sales including interest income basis. This had been boosted by a 14.9 per cent increase in online sales, which helped offset the seven per cent fall slump in its store sales during the year.
The fashion chain downgraded its full-year profit forecast to £723 million, from the £727 million previously expected. This was the effect of it selling more seasonal products, such as personalised gifts and beauty products, which make a lower profit margin than clothing ranges. It had also faced higher operational costs on its online sales.
“In the year ahead, we are assuming a similar economic environment as that experienced in the second half of the current year. Within this guidance, we expect retail sales to be down 8.5 per cent and online sales to be up 11 per cent.”
Next warned that these predictions came with a “high degree of uncertainty” and did not factor in the “potential benefits of a smooth transition or the downsides of a disorderly Brexit”