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Next upgrades profit outlook again on hot summer sales strength

The UK retailer now expects full-year pre-tax profit of £1.2bn, after second-quarter full-price sales rose 9% and stores saw weaker trading.

Reported · Written up by our desk · Guidance

Next has raised its profit guidance for the third time this year, citing a sweltering summer that boosted clothing demand and the release of pent-up demand in the Middle East and northern Europe, according to the Guardian Business. The update covered the 13 weeks ended 1 August.

The company reported that full-price sales rose 9% in the second quarter versus the same period last year, more than double its initial estimate of a 4% increase. Growth was led by Next’s suite of alternative brands and strong online sales, while trading in stores declined as customers shunned high streets during the hottest months.

Next, which owns the UK rights to Gap and Victoria’s Secret and has stakes in brands including Reiss and Joules, now expects to end the year with pre-tax profit of £1.2bn. That is about £25m higher than previously expected, implying a potential 7.3% rise versus last year.

Shares jumped nearly 7% to a fresh record high on Wednesday morning, making Next the best performer across the FTSE 100. The article also notes that retailers elsewhere have warned about a challenging consumer environment tied to inflation and falling confidence amid the Iran war.

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