Next raises profit expectations after smaller end of season sale
Fashion and homewares retailer Next has raised its full year profit guidance after adding £10 million to its profits in the first half of its financial year.
In the 26 weeks to 27 July 2013, total sales rose 2.3% helped by an 8.3% increase in online and catalogue sales at Next Directory. However, the good news did not extend to Next’s high street stores where sales edged down 0.9%.
In a statement, Next said its full price sales were somewhat better than the headline figure as a result of a much smaller end of season sale. Prior to the start of the clearance on 13 July, sales were 3.7% ahead of the same period in the previous year as the retailer entered the sale with 20% less stock than last year. Clearance rates also improved while markdown sales were down by only 13%.
The retailer said it had continued to experience the weekly sales volatility seen in first quarter and suggested that its customers were becoming more spontaneous in their purchasing habits with sales being increasingly affected by short term events such as a change in the weather and the timing of Bank Holidays. “We do not believe increased volatility has much effect on overall spending, but it does mean short term consumer trends are harder to read,” Next added.
Pre-tax group profit expectations have now been revised upwards after the higher full price sales and lower markdowns added £10 million to first half profits.
Next now expects profits for the year to January to be in a range of between £635 million to £675 million, up from the £615 million to £665 million predicted in March.