Next lowers sales and profit outlook

In the 12 Months to January 2022, Next brand full price sales increased by 32.4 percent compared to the prior year and by 12.8 percent compared to two years earlier.

The company’s pre-tax profit of 823 million pounds was up 140 percent year-over-year and up 10 percent year-over-two-years. Earnings per share came in at 530.8p, up 138 percent against 2020/21 and up 12 percent versus 2019/20.

Following the closure of the company’s websites in Ukraine and Russia, and after moderating growth expectations in some other overseas territories, Next has lowered its sales guidance for 2022/23 by 85 million pounds, or 2 percent, and lowered its profit guidance by 10 million pounds, or 1.2 percent.

Improved outlook for UK retail sales

“We have navigated our way through the pandemic and the structural changes affecting our sector, to deliver record sales and earnings per share. We went into the pandemic with a well established online business and a diverse product offer,” said Next CEO Simon Wolfson.

“This allowed our online business to make up for much of the sales we lost in retail; and accommodate the dramatic shift in sales between different product categories experienced during lockdown,” he said.

The company said in a statement that in its new guidance, an improved outlook for UK retail sales has mitigated the anticipated loss of lower margin sales overseas and the associated cost of increased markdown.

The company’s central scenario for the year ahead is that full price sales will increase by 5 percent and group profits will increase by 3.3 percent to 850 million pounds, while earnings per share are forecast to be 556.6p, up 4.9 percent versus 2021/22.