UK Clothing Retailer Next Ups Profit Outlook Again

People walk past a store of clothing retailer Next, in London, Britain, December 2, 2021. REUTERS/May James

British clothing retailer Next on Thursday raised its profit forecast for the year to end-January 2024 for the fifth time in eight months as it reported a better-than-expected rise in Christmas sales.
The group, which trades from about 460 stores in the UK and Ireland and has an online presence in over 70 countries, did, however, caution that difficulties with access to the Suez Canal, if they continued, were likely to cause some delays to stock deliveries in the early part of the year.
Next is often considered a useful gauge of how British consumers are faring.
Britain's shoppers have been hit by a rise in borrowing costs which stand at a 15-year high and by rapid inflation which dropped below 4% in the latest data but has outpaced growth in wages for much of the past two years.
Despite that, Next said full-price sales rose 5.7% in the nine weeks to Dec. 30, Reuters reported.
Sales in stores rose 0.6% year on year, while online sales were up 9.1%, benefiting from service improvements.
It said it now expected pretax profit before exceptional items for the year to January 2024 of 905 million pounds ($1.15 billion), above previous guidance of 885 million and the 870.4 million it made in 2022/23.
The group also gave guidance for its 2024/25 year, forecasting a rise in full-price sales up 2.5%, total group sales up 6.0% and profit up 5% to 960 million pounds.
"On the face of it, the consumer environment looks more benign than it has for a number of years, albeit there are some significant uncertainties," Next said.
It said positive factors were wages rising faster than prices and zero inflation in its selling prices.
However, risk factors were a weakening employment market, the expiration of consumers' fixed-rate mortgages and supply chain risks.
Shares in Next have risen by 36% over the last year.
Separately on Thursday, British sportswear retailer JD Sports Fashion lowered its full-year profit forecast.