Next shares surge on sales and profits upgrade
TV presenter Emma Willis has a collection at Next
Shares in fashion retailer Next shot up by as much as 9% after saying it was upgrading its profits guidance following a surge in sales.
In an unscheduled update it said a combination of pent-up demand, warm weather, fewer overseas holidays and accumulated consumer savings had led to an 18.6% rise in full-price sales in the three months to 17 July on expectations of a 3% uplift.
The company said it now expected annual pre-tax profits of £750m, up £30m from previous forecasts and towards the top end of estimates.
Next said it was also repaying £29m in business rates relief received after consultation with major shareholders.
Shares closed 7.47% higher at 7996p.
Russ Mould, investment director at AJ Bell said: “Next is managing to keep its stores more relevant by using them for a combination of click and collect, customer services and as a showcase for products.
“Before the pandemic, Next’s online customers collected nearly half of their orders from stores and more than 80% of returns went back to a physical store rather than in the post.
“To make sure staff are kept busy, Next is now experimenting with store staff handling some work that would normally go through a contact centre. That’s a clever move and keeps the business running efficiently.
“Next is giving customers a reason to keep visiting its stores and in doing so it has an opportunity to try and sell them more items.”
The news came as the European football championships helped give a 1% like-for-like lift to Scottish retail sales last month compared to June 2019.
Sales of televisions as well as food and drink, and fashion categories did slightly better, driven by the return of some aspects of socialising.
David Lonsdale, director at the Scottish Retail Consortium, said: “Scottish retail sales eked out a further modest improvement in June, the second full month since all shops were permitted to re-open, recording the best monthly performance since the onset of Covid.”