Next has increased its profit forecast for the year following higher than anticipated sales of £38m during the holiday season.
The retail store for fashion and home goods reported a significant increase in full-price sales, with a rise of 10% during the final two weeks leading up to Christmas. As a result, sales for the nine-week period ending on December 30th increased by 5.7%, surpassing expectations of only a 2% increase.
This marks the fifth instance in the past seven months where Next has raised its projected profits.
Next reported strong online performance following service improvements, resulting in a 9.1% increase in sales for the three months ending in December. In-store sales also saw a slight rise of 0.6% after a previous decline.
The company, headed by the longstanding CEO Simon Wolfson, announced that it anticipates earning a total profit of £905m for the entire year, which is £20m higher than its previous estimate.
The company projected a 2.5% increase in full-price sales for the upcoming year, with a total increase of 6%, which includes the addition of new brands like Gap and Reiss, as well as discounted items.
The unexpectedly strong sales numbers are likely to improve expectations for retailers during the holiday season. It was believed that shoppers would reduce their purchases of clothing due to limited household budgets and a renewed focus on travel.
The positive atmosphere was dampened by JD Sports’ announcement of lower profits. They cited the warm weather in early autumn and unexpectedly high levels of discounts leading up to Christmas as factors that affected their sales.
The company stated that its profits are projected to be less than £935m, which is 10% lower than their initial estimate of £1.04bn.
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The JD Sports Fashion group’s new CEO, Régis Schultz, stated that their main markets have experienced higher levels of sales promotions during the busiest time of the year due to a more careful consumer. However, they are still gaining a larger portion of the market. The company remains confident in their plan and is continuing to invest in their supply chain, systems, and stores. This is possible due to their strong ability to generate cash and maintain a healthy balance sheet.
Source: theguardian.com
