Next Exceeds Sales Expectations, Generates £10m Extra Profit
In a recent trading update, high street retailer Next announced that it has generated an additional £10m in profit due to increased sales. The company, which is a constituent of the FTSE 100, expects its profits to reach £845m by the end of the financial year, a £10m upward revision from previous estimates.
Next’s sales have been better than anticipated, with full price sales surpassing the company’s expectations by 6.9% between May and July. In the six weeks leading up to 29 July, sales increased by 3.7% compared to the previous year, exceeding the predicted growth of 0.5%.
The higher sales have resulted in an additional £16m in full price sales over the last six weeks, as well as improved clearance rates during the summer sale. Prior to the sale, Next had 22% less surplus stock compared to the previous year.
Despite surpassing the 0.5% sales target, Next has maintained its full price sales forecast for the second half of the year. This is not the first time in recent months that Next has exceeded expectations. In March, the company outpaced its own increased profit guidance by £10m after reporting better than expected Christmas sales.
In January, Next increased its profit outlook as a result of the strong Christmas sales performance. Sales were up nearly 5% in the nine weeks leading up to 30 December, surpassing the retailer’s forecast and exceeding expectations by £66m.
The Office of National Statistics (ONS) reported that the only month this year where retail sales fell was in March, which was attributed to the wet weather. Despite this, Next has continued to perform well and has been on a buying spree, acquiring struggling brands such as JoJo Maman Bebe, Joules, Made.com, and Cath Kidston.
Next’s success in exceeding sales expectations and generating additional profit highlights its strong position in the retail market. With its continued growth and strategic acquisitions, the company is poised for further success in the future.