Next Says Q2 Full-Price Sales Stronger Than Expected

By Scott Kanowsky

Investing.com -- Next PLC (LON:NXT) has announced that it will post better-than-expected second-quarter sales as the fashion retailer was boosted by warm weather in June and July to helped drive in-store foot traffic.

The Enderby, England-based company said in its interim results it will report 5.0% in quarterly full-price sales versus the previous year, beating its prior guidance by £50M. Along with hotter temperatures, Next credited a "marked return" to formal dressing, stemming from a post-pandemic renewal of social events, for lifting demand.

Shares in Next rose in mid-morning European trading on Thursday.

In the three months to July 30, retail sales jumped by 12.0% year-on-year, with online shopping rising by 0.2%. In a statement, Next explained that these figures suggest "something of a renaissance" for in-store demand, but a "halt" in digital growth.

However, the firm said that the changes "reflect a short term reversal of pandemic trends and are unlikely to be indicative of longer term trends in consumer behaviour."

With the quarterly sales in mind, Next also raised its central guidance for full-year pre-tax profit by £10M to £860M. This would represent a 4.5% increase in income versus last year.

But the group warned that its strong recent three-month performance is not expected to continue into the rest of the year.

"An unusually warm summer boosted sales in the first half and we do not expect a similar weather windfall in the second half; and [...] the impact of inflation on consumer spending is likely to worsen in the second half," Next said.

The company will release its complete first-half earnings on September 29.