19th Jun 2023 13:47
(Alliance News) - Next PLC on Monday lifted yearly guidance after enjoying better-than-expected trading in recent weeks due to warmer weather and more consumer spending power.
Shares in Next were up 5.0% at 6,758.00 pence on Monday afternoon in London.
The clothing and homewares retailer said trading in the last seven weeks was "materially better than the guidance".
Next said full price sales in the first seven weeks of its second quarter were up 9.3% year-on-year, a sizeable beat to the forecast of a 5% fall. Next's second quarter ends on July 29.
"We have beaten our full price sales estimates by GBP93 million," Next explained.
As a result, it has lifted pretax profit guidance to GBP835 million from GBP795 million previously. It would represent a 4.1% decline from GBP870.4 million a year prior.
It has upgraded its full price sales guidance to GBP4.67 billion from GBP4.53 billion, so up 1.4% on-year, from the previous guidance of GBP4.53 billion, which would have been a 1.5% fall.
The company attributed the improved performance in part to the onset of warmer weather after a cold and wet April. It also said annual salary increases in the current inflationary environment had delivered "a significant uplift" in real household income.
However, Next said "it is reasonable to expect" that the effect of these factors will diminish overtime with inflation offsetting the impact of pay increases. Consequently, it does not expect the current performance to continue at the same level in the long-term future.
By Emma Curzon, Alliance News reporter
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