LONDON (Reuters) – British fashion retailer Next said it had soundly beaten its expectations for full-price sales, with a rise of 19% in the last 11 weeks compared with two years ago, and as a result it was increasing its profit guidance.
The company, which had assumed its sales would rise by around 3%, increased its central guidance for full-year profit before tax by 30 million pounds ($41 million) to 750 million pounds.
It put the sales surge down to a combination of pent-up demand for adult clothing, the onset of warm weather at the end of May and start of June, and an increase in spending from fewer holidays abroad and consumers savings acquired in lockdown.
The company, which has a track record of beating guidance, said it expected sales for the second half of year to January 2022 to rise by 6% rather than 3%.
The increase in profit guidance would have been higher had it not decided to repay 29 million pounds of business rates relief, accounting for the time its shops were open. It said it had taken the decision after consulting major shareholders.
Next, which has a well-established online operation and store network, said its surplus cash for the year was forecast to be 240 million pounds, which it planned to give to shareholders via special dividends, the first of which would be paid in September.
($1 = 0.7351 pounds)
(Reporting by Paul Sandle; Editing by Kate Holton and Sarah Young)
