Clothing retailer Next PLC (LSE: NXT) has once again lifted its profit forecasts after sales over the key Christmas period significantly exceeded expectations.
The company said sales at constant currency for the nine weeks to December 30 were up 5.7% year-on-year, some £38 million higher than its previous guidance. Growth accelerated to 10% in each of the weeks beginning December 17 and 24.
Next now expects full-year pretax profit of £905 million, a £20 million increase on its previous outlook and 4.0% higher than last year’s £874.7 million. Excluding brand amortisation costs, profit is seen at £914.7 million compared to £874.7 million last year.
Charlie Huggins, manager of the “Quality Shares Portfolio” at Wealth Club, described Next’s performance as “outstanding” and said it “has demonstrated once again why it is considered one of the best run retailers around.”
He noted that UK consumer spending has “defied gravity” thanks to a strong jobs market and rising wages cushioning the impact of inflation.
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Next shares jumped 5% on the upgraded guidance to trade at 8,492 pence in early trading. The stock has now risen 39% over the last 12 months.
Looking ahead, Next cautioned that risks remain from factors like mortgage rates and supply chain disruption. But it said core inflation appears to be easing and wage growth is outpacing prices, easing cost-of-living pressures on consumers.
