UK: Next lifts outlook on warm weather boost
Fashion retailer Next Plc has lifted its full-year profit forecast after warm Easter weather and spending ahead of the Royal Wedding bank holiday boosted sales.
The retailer today (4 May) said it expects total full-year sales to be 1% to 4% higher than the prior year, giving a pre-tax profit of GBP535m to GBP585m (US$883-966m). This is around GBP15m ahead of March forecasts.
But it also warned a likely 8% rise in selling prices as a result of higher input costs such as cotton, as well as public sector deficit cuts, are likely to curb consumer spending as the year progresses.
That said, the retailer is up against softer comparative numbers in the final quarter when snow hit the UK, and believes “there is every chance that inflationary pressure on the consumer will ease towards the end of the year, as commodity price increases begin to annualise.”
The improved outlook comes after revenues in the 13 weeks to 30 April rose 5.2% on the same period last year – well ahead of earlier guidance. Retail sales rose 0.9%, while revenues from its Directory business surged 14.8%.
“We estimate that at least 2.5% of the over-performance came as a result of exceptionally warm weather over Easter and spending in anticipation of the Royal Wedding Bank Holiday,” the company said. It added that better ranges and improved stock availability contributed to its performance.
“We believe these factors have encouraged consumers to bring forward summer purchases and we do not expect the current levels of growth to continue into the second quarter.”
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Fashion retailer Next Plc today (14 September) said it had managed to navigate a "perfect storm" of rising costs to post an 8.5% rise in first-half pre-tax profit, and offered reassurances that prices...
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