Next has increased its full-year profit outlook for the third time in 2023 due to a rise in pre-tax profit for the first half of the year and better-than-expected sales. In the first half, revenue reached £2.5 billion, with a 0.5% increase in retail sales and a 5% surge in online sales. Pre-tax profit for the six months ending July 30 rose 4.8% to £420 million, compared to £401 million the previous year.
Furthermore, Next has revised its full price sales forecast for the second half, now expecting a 2% increase from last year, as opposed to the previous guidance of 0.5%. The company also anticipates achieving £46 million more in cost savings this year than initially planned.
Looking ahead, Next believes that inflationary pressures on selling prices and operating costs will continue to ease, and the long-term outlook is more positive than in previous years. The retailer admits to being overly cautious about sales prospects for the current year and underestimating the positive impact of wage increases and a strong employment market on its top line. Next acknowledges that sales have surpassed expectations, its online service has significantly improved, costs are lower than expected, and all three new business streams are showing promise.
Last month, Next upgraded its profit guidance for the second time this year, driven by better-than-expected full price sales. A recent report by Barclays titled “The New Retail Reality” revealed that over 85% of retailers are confident about growth in the coming year.
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