Next reduced its profit guidance and predicted selling prices would rise by 8% in the second half of the year as the fashion retailer reported a more than doubling of annual profit.
Pretax profit jumped by 140% to £823.1m in the year to the end of January from a year earlier as group sales rose 34% to £4.86bn. Profit rose 10% from two years earlier and sales were up 11.5%.
Next reduced its central annual profit guidance by £10m, or 1.2%, to £850m. The company said UK sales were better than expected but the group cut its forecast for full-price sales by £85m based on the closure of its websites in Russian and Ukraine and reduced forecasts for other overseas markets.
The FTSE 100 company predicted its prices would rise 3.7% in the first half of the current year and by 8% in the second half – up from a 6% forecast in January.
Next said its results were boosted by pent-up demand for clothing as Covid-19 restrictions were removed and consumers spending money they had saved during lockdowns. UK sales have remained strong but the outlook is uncertain for retailers amid soaring inflation and what is forecast to be the biggest drop in living standards since the 1950s.
“Last year exceeded all our expectations,” Chief Executive Simon Wolfson said. “The buoyancy of our sales last year, along with the benign economic environment that accompanied it, make comparatives in the year ahead challenging. Last year’s strength contrasts with this year’s unusually high level of geopolitical and economic uncertainty. The combination of these factors make accurate guidance particularly difficult.”
