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NEXT sees annual profits topping £1 billion after autumn sales boost

TheIndustry.fashion
30 October 2024

NEXT said it is on track to make more than £1 billion in annual profit after raising its outlook for the third time in three months.

The high street giant cheered a colder weather boost to sales of its autumn/winter ranges, with full-price sales jumping 7.6% in its third quarter to 26 October.

The retailer – led by chief executive Lord Simon Wolfson – put the performance down to the "early arrival of colder weather this year, versus an unusually warm September and early October last year".

It had been expecting third-quarter sales to increase by 5%.

NEXT said it is increasing its full-year pre-tax profit guidance by £10 million to £1.01 billion, surpassing the £1 billion milestone and marking a 9.5% rise on profits in 2023-24.

Annual full-price sales are now expected to lift 4.9% to £5.02 billion.

It comes after the group raised its sales and profit expectations in both September and August.

NEXT is pencilling in more muted sales growth of 3.5% in its festive quarter to the end of January, as it said some trading will have been "pulled forward" into the bumper third quarter for the firm.

The group said last month that it is entering a "new era" thanks to its burgeoning overseas sales and strength in combining online with bricks-and-mortar shops.

Its latest trading update showed UK online sales rising 7.9% in the third quarter, with 2.9% growth across retail shops.

But overseas online sales soared 20.4% and are up 22% so far in the firm’s financial year.

Julie Palmer, Partner at Begbies Traynor, said:  "NEXT has raised the bar even higher in Q3, with sales up a remarkable 7.6% year-on-year, once again beating its own expectations and leading to yet another increase to guidance.

"The FTSE 100 retailer has managed to harness the recent colder weather and boost demand for its autumn/winter collections, especially with back-to-school shoppers, at a time when many smaller retailers have not had such success.

"Encouragingly, UK sales have been strong across both its online and bricks-and-mortar channels, with total UK sales up by a healthy 5.8% in the quarter in another sign of the retailer’s impressive versatility and resilience.

"For now, the FTSE 100 stalwart will be hoping Rachel Reeves’s budget does not trigger a downturn in consumer spending and that it can continue to dominate the retail scene into the new year.

"Budget aside, as we head towards Christmas, one of the most important periods in the year for retail, NEXT stands in exceptionally good stead for the busy period as it seeks to achieve over a billion pounds in profit for the year, a remarkable feat for the retail veteran."


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