6th Jan 2022 09:08
(Alliance News) - Next PLC on Thursday said sales in the eight weeks to December 25 exceeded pre-pandemic levels, and it declared a special dividend to be paid at the end of this month.
The Enderby, England-based clothing, footwear and home products retailer said full-price sales in the period to December 25 were up 20% from pre-pandemic times.
The figure was GBP70 million ahead of guidance, the retailer noted, though it didn't provide a figure for sales in the recent period.
Next attributed the sales growth to robust consumer demand and a "strong revival" in adult formal and occasionwear that significantly improved sales throughout the final period.
Following its decent Christmas trading, the FTSE 100-listed company lifted profit guidance.
It now expects pretax profit of GBP822 million for the financial year ending in January, which would be a 9.8% hike from pre-pandemic times.
Its previous outlook for pretax profit was GBP800 million.
Pretax profit in the year that ended January 30, 2021 was GBP342 million.
For the year about to end, Next expects full-price sales growth of 13% from two years earlier, also GBP70 million ahead of forecasts.
For the following year, so the financial ending January 2023, it expects full-price sales to rise 7.0% annually.
"Our headline sales growth expectations of 7.0% sounds uncontroversial. However, forecasting sales for the year ahead is unusually difficult and the buoyancy of recent months makes it all the harder," the retailer said.
The Christmas period was not without its own difficulty. Next said stock levels were "materially lower than planned" and it saw a hit to delivery service levels due labour shortfalls.
Looking ahead, the company reported "five areas of uncertainty in the wider economic environment". They include travel, pent-up demand and savings, essential goods inflation, Next goods inflation, and the tax and interest rates environment.
Next declared a 160 pence special dividend which will be paid by the end of this month. It will return to its "pre-pandemic ordinary dividend cycle in the year ahead", Next said.
Shares were down 1.6% at 7,913.50 pence each on Thursday morning in London.
By Abby Amoakuh; [email protected]
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