After an improvement on its best case scenario, in the wake of COVID-19, Next is estimating full year profit before tax to be £195m. This is based on full price sales for the full year being down 26%.
A trading statement has revealed full price sales in the retailer’s second quarter were down 28% against last year. Next noted that “this is much better than [it] expected and an improvement on the best-case scenario given in [its] April Trading Statement.” Total sales (including markdown and clearance sales) were also down 28%.
Next said: “The Company is in a much better position than we anticipated three months ago: consumer demand has held up better than expected and our Online warehouses have achieved much higher capacities than we thought possible. Costs have been well controlled, and we have taken steps to ensure that our balance sheet is secure.
“Whilst much of our time has been focussed on managing the business through the pandemic, we have not lost sight of the fact our sector was already experiencing far-reaching structural changes as consumers increase their expenditure Online.
“If anything, these changes are likely to accelerate as a result of the crisis. So, we have continued to move the business forward, actively investing in the systems, Online capacity and business ideas that we believe will be important in a post pandemic world.”