Next boosts outlook on bumper festive trading

(Sharecast News) - High street retailer Next lifted full-year guidance on Tuesday, on the back of better-than-expected festive trading. In the nine weeks to 27 December, full-price sales rose 10.6% year-on-year, comfortably ahead of forecasts for a 7% improvement across the entire quarter.

In the UK, sales rose 5.9%, while international sales soared 38.3%, far outstripping guidance for a 24.3% uplift.

As a result, the company now expects total group sales in the year to 31 January to come in at £6.97bn, a 10.3% increase year-on-year. Pre-tax profits are expected to rise 13.7% to £1.15m. Next had previously guided for annual sales of £6.87bn and pre-tax profits of £1.14bn.

However, the fashion and homeware brand - which is known for its conservative forecasts - adopted a notably more cautious outlook for the following year.

It expects growth to slow, with total group sales forecast to rise 4.2% to £7.26bn, and pre-tax profits to rise by 4.5% to £1.2bn.

Total full price sales are expected to grow by 4.5%, notably slower than the 10.7% rise slated for the current year. Next attributed the slowdown to tough comparatives, after the warm summer and disruption at Marks & Spencer boosted trading earlier this year.

It also warned: "Continuing pressures on UK employment are likely to filter through into the consumer economy as the year progresses."