Next is increasing its profit guidance for the full year after sales in the eleven weeks to 17 July were “materially ahead of [its] expectations.”
Full price sales in the period were up 18.6% versus two years ago. Whereas Next’s previous central guidance assumed an increase of 3%.
The company noted that this is likely a result of pent-up demand for adult clothing, with many customers having made few summer purchases during the last 18 months, the onset of extremely warm weather at the end of May and start of June (growth significantly slowed once the very warm weather passed), fewer holidays overseas likely increasing domestic spending, and consumer savings materially increasing over the last year.
The retailer is boosting its central guidance for full year profit before tax by £30m to £750m.
Next has also revealed that it will repay £29m of business rates relief to the Government. This sum accounts for the period of time this year that Next shops were not charged business rates but were open. The decision was taken after consulting major shareholders.