Next Reports Better-Than-Expected Sales and Raises Profits Forecast Despite Wet Start to Summer
Clothing chain Next has announced strong sales and increased its profit guidance for the year, despite a damp start to the summer season. In a trading statement released on Thursday, the retailer revealed that full-price sales between the end of May and the end of July exceeded expectations, with a growth of 3.2% compared to the same period last year.
Next had originally anticipated a 0.3% decline in sales during this time, citing last year’s “exceptionally favourable” weather as a contributing factor. The company, which operates over 800 stores in the UK and has nearly eight million online customers, also raised its profit forecast for the full year by £20m to £980m.
The retailer attributes its success to a boost in overseas online sales, which saw a significant increase of nearly 22% during the second quarter. Next also credits its takeover of rival FatFace last year and the increase in its stake of fashion brand Reiss from 51% to 72%.
The positive news from Next comes amidst a challenging time for the retail industry, as trade association the British Retail Consortium (BRC) recently reported a “gloomy” start to the summer season. The BRC cited a colder than usual June as a contributing factor to a 1.2% decline in retail sales by volume in the same month, according to the Office for National Statistics.
However, the BRC expressed optimism last month that major events such as the Euros, Wimbledon, and the upcoming Olympics would help drive consumer spending. With the recent better weather and the promise of more events to come, retailers are hopeful for increased footfall and sales this summer.
