Summary
Sales at Next beat expectations in the third quarter but the retailer warned of slowing growth in the UK as consumers cut spending amid rising energy bills, mortgage rates and fuel costs. Full-price sales rose 8.1% year-on-year for the 13 weeks to October 31, around £33m ahead of guidance of 5.8% for the second half, The Times reported.
Details
A 32.2% increase in online international sales drove growth, comfortably ahead of forecasts of 20.5%. However, the retailer, which has stores in Gloucester and Cheltenham, warned of ‘volatile’ growth in the UK, with the summer heatwave impacting sales in September. UK sales were up 2.2% year-on-year.
Next’s results will be viewed as a key indication of consumer spending in the run-up to Christmas, with household budgets under pressure from the continued energy price show caused by the Iran War. Next has been forced to raise prices in response to the conflict in the Middle East which has disrupted trade routes and pushed up global oil and gas prices.
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Despite this, Next’s shares have risen sharply this year with the retailer raising annual profit guidance four times in the current financial year. The group maintained forecasts of about £1.3bn for annual pre-tax profits , up 8.4% year-on-year. The retailer has about 500 shops in the UK.
Report source: Punchline Gloucester
