Major retailer outperforms best-case scenario it expected at start of lockdown

Retailer Next has delivered a performance that was “an improvement on the best-case scenario” imagined in April, near the start of the lockdown restrictions.

Full price sales in the second quarter were down 28% against last year.

It is now forecasting full-year pre-tax profits of £195m, based on its central forecast of a 26% fall in sales across the whole year.

It said: “There is still much that remains uncertain and our central scenario cannot be accorded the same degree of confidence that our guidance would normally receive at this time of year.

“Nonetheless, our experience over the last 13 weeks has given us much greater clarity on our online capabilities during lockdown and the state of consumer demand, and we are now more optimistic about the outlook for the full year than we were at the height of the pandemic.”

Retail analyst Richard Lim, chief executive of Retail Economics, said: “Sales were dealt a devastating blow during the lockdown but have bounced back at an astonishing rate.

“Their nimble response to the pandemic highlights the inherent flexibility of their operating model and strength of the business. They have leveraged their online capabilities and strong balance sheet to position themselves effectively to deal with future challenges. After years of investment in their digital operation, they are well-positioned to capitalise on the seismic shift we’re witnessing towards online.”