UK fashion retailer Next on Thursday said Christmas trading had been better than expected but remained cautious about profits for the coming year, predicting a small decline.
The FTSE 100 group is the first significant retailer to update on trading over the most important period of the year. It said full-price sales were up 4.8 per cent in the nine weeks to December 30 against its own prediction of a 2 per cent fall.
It said the onset of cold weather in December had boosted sales, while comparative figures for last year were affected by Covid-19 and stock shortages.
That means profit for the year to January 2023 is now expected to be £860mn, up £20mn from its previous projection.
Next said the outlook for the year to January 2024 was cautious, predicting a 1.5 per cent decline in full-price sales and a pre-tax profit of £795mn, which would be a fall of 7.6 per cent from this year’s projection. The figure was ahead of consensus forecasts of about £780mn, however.
Although inflation had eased in some areas, Next said it expected spring and summer ranges to cost 8 per cent more than last year and autumn-winter lines to be 6 per cent more. It also said it would have to absorb increases in electricity and labour costs.