LONDON: British clothing retailer Next has kept its forecast for annual profit after reporting a 5.7% rise in first-quarter (1Q) full price sales, slightly ahead of its guidance.
With more than 800 stores in the United Kingdom and Ireland and nearly eight million online customers, Next is often considered a gauge of how British consumers are faring.
The group reiterated that it expects its sales in 2Q to be weaker than 1Q to April 27 because last year it benefited from particularly warm weather from late May to the end of June.
It expected a profit before tax of £960mil (US$1.2bil) in its 2024/25 year, up from £918mil in 2023 and 2024.
It also kept its forecast for full-price sales to increase 2.5% over the year, guiding to a fall of 0.3% in 2Q and a rise of 2.5% in 3Q and 4Q.
Shares in Next were down 1% in early trading, paring 2024 gains to 10%, reflecting the lack of a profit upgrade for the year.
Store sales in 1Q were flat, while online sales were up 8.8%.
Last month, Next said prospects for Britain’s consumers were the brightest since before the pandemic.
It said positives included wages rising faster than prices and zero inflation in the group’s own products. Risk factors were a weakening jobs market and consumers having to renegotiate mortgages at higher rates.
“Next should benefit from improving UK real disposable incomes albeit it may still be affected somewhat by the lagged impact from higher interest rates,” RBC Europe analysts said. — Reuters