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Next raises profit outlook as summer sales momentum beats estimates
The retailer now forecasts full year pre-tax profit of £1.2bn, up about £25m from its prior expectations, after full-price sales grew 9% in the second quarter.
UK clothing and homeware retailer Next upgraded its profit guidance again, citing stronger-than-expected summer demand helped by sunny weather and “pent-up demand” across the Middle East and northern Europe.
Next said it expects to end the year with pre-tax profit of £1.2bn, about £25m higher than previously expected, and implied a potential 7.3% increase versus last year. The company attributed the update to a broader sales recovery, with full-price sales rising 9% in the second quarter compared with the same period last year, more than double its initial 4% estimate, according to the Guardian Business.
The FTSE 100 company, which operates more than 500 stores in the UK and owns the UK rights to US brands Gap and Victoria’s Secret, saw its shares jump nearly 7% to a fresh record high on Wednesday morning. The outlet also noted Next has a history of raising expectations and beating them, a pattern that has contributed to a more than 20% rise in its stock over the past year.
The update comes as other retailers face pressure from weaker consumer conditions and inflation, with the Guardian Business citing commentary on John Lewis warning that profits are being squeezed by tough trading conditions.
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