Next PLC (LSE: NXT) has witnessed a notable increase in its share price today, surging by 5.0% to reach 6,758.00 GBX. This rise can be attributed to the company’s strong trading performance in recent weeks, exceeding expectations and signalling positive momentum.
During the first seven weeks of the second quarter, Next has shown robust growth in full-price sales, with a remarkable 9.3% year-on-year increase. This performance has defied earlier predictions of a 5% decline, surpassing Next’s own projections by a significant margin of £93 million.
Encouraged by these results, Next has revised its pretax profit guidance upwards, elevating it from £795 million to a revised figure of £835 million. Although this adjustment represents a 4.1% decline compared to the previous year’s £870.4 million, it reflects a positive shift in the company’s financial outlook.
The retailer attributes its improved performance to multiple factors, including the arrival of warmer weather following a cold and wet April. Additionally, in the current inflationary environment, annual salary increases have provided a substantial uplift to real household income, driving consumer spending power.
However, Next remains cautious about the future and acknowledges that the impact of these factors may gradually diminish over time. Inflation could offset the benefits of salary increases, tempering the exceptional performance observed in the short term.
