Next upgrades profit forecast after strong first quarter

Next has seen sales drop by 1.5% in its first quarter – a much better outcome than its previously expected.

The Enderby retail giant’s results are being compared with those of two years ago as the firm believes that will be “more meaningful” than with 2020, and has upgraded its full-year profits forecast by £20m to £720m.

Online sales have boosted the peformance, with revenues soaring by 65%, while high street sales slumped by 76%.

Richard Lim, CEO of Retail Economics, said:“These are terrific results against an incredibly tough backdrop for the retail sector. Despite mass store closures, the business pivoted its proposition towards home furnishings, its overseas presence and third-party labels, while maximising its online advantage.

“The retailer is benefiting from the vast sums invested in their online operation and the well-established partnership approach which pre-empted where the industry was heading.

“As expected, apparel remained under significant pressure as lockdown restrictions and the shift towards home working undermined demand for clothing. But as the economy reopens and lockdown restrictions ease, the business is well-positioned to benefit from a considerable amount of pent-up demand.”

The company’s next sales update will cover the first 26 weeks of the year to 31 July, and is scheduled for Wednesday 4 August.