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Next reports strong trading, raises outlook

By Prachi Singh

6 Jan 2022

Business

Image: Next spring 2022, Next media gallery

In the eight weeks to December 25, full price sales at Next plc were up 20 percent versus two years ago. This, the company said, was 70 million pounds ahead of its previous guidance for the period.

For the full year, Next now expects full price sales growth of 12.8 percent versus 2019/20, 70 million pounds ahead of the previous guidance. The company has increased pre-tax profit guidance for the full year by 22 million pounds to 822 million pounds based on full price sales in January being 12 percent ahead of two years ago.

Next reports strong trading The company’s initial guidance for the year ending January 2023, for full price sales was to be up 7 percent versus the current year. Next estimates that profit before tax will be up 4.6 percent at 860 million pounds.

The company added that full price sales growth of 7 percent versus 2021/22, represents 6.5 percent compound annual growth against 2019/20, which was the last year to be unaffected by Covid. The guidance reflects very strong growth in the first quarter, when stores were shut in 2021 and anticipates much weaker year-on-year growth in the last three quarters of 2022 as comparative numbers improved in 2021.

The company was expecting sales growth in Q4 to be weaker than Q3, however, a strong revival in Next branded adult formal and occasionwear improved sales throughout the final period.

In the run up to Christmas, the company’s stock levels were materially lower than planned and it also experienced some degradation in delivery service levels as a result of labour shortfalls in warehousing and distribution networks. The company further said that the fact that our sales remained so robust in these circumstances is testament to the strength of underlying consumer demand in the period.

Next declares special dividend The company’s board has declared a further special dividend of 160p per share to be paid at the end of January 2022.

Next intends to return to the pre-pandemic ordinary dividend cycle in the year ahead.