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(Alliance News) - Next PLC raised its full-year profit guidance and resumed dividends with a special payout on Wednesday after recent sales were "materially ahead" of internal expectations.
The clothing and homewares retailer boosted its pretax profit prediction for the financial year that will end in January 2022 by GBP30 million to GBP750 million, near the upper end of its previous guidance to reflect higher-than-expected sales.
Next posted pretax profit of GBP342.4 million in financial 2021, down 54% from GBP748.5 million in financial 2020.
Next shares were up 8.9% to 8,052.00 pence, making it the top gainer in the FTSE 100 early Wednesday.
The Leicestershire, England-based retailer said full-price sales in the eleven weeks to July 17 were up 19% on two years ago, ahead of its guidance of 3% growth.
To date Next said it has taken GBP39 million in additional profit from full price sales and expects a further GBP1 million in the next two weeks.
The retailer said the increase was likely due to pent-up demand for adult clothing, especially for summer-suitable items through recent heatwaves. Next also suggested that the disposable income of its customers may have been boosted by fewer overseas holidays and consumer savings through lockdown.
As a result, the company has lifted full-price sales guidance for the rest of the year to 6% growth from 3%.
Next resumed dividend payments, with plans to redistribute its expected full-year surplus cash of GBP240 million, through special payouts to shareholders.
The first special dividend of 110p is due in September, the company noted.
Next plans to announce another special dividend alongside its Christmas trading statement in January next year, and return to ordinary dividends in the financial year to January 2023, after ceasing dividends in its previous financial year that ended this past January.
By Scarlett Butler; scarlettbutler@alliancenews.com
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