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* First half profit up 5.9% compared to 2019
* Sales in last eight weeks up 20% versus two years ago
* Next says "things may not be as good as they appear"
* Shares hit record high
(Adds details, shares)
LONDON, Sept 29 (Reuters) - British clothing retailer Next
raised its full-year profit outlook on Wednesday for the fourth
time in six months as it reported a 5.9% rise in first-half
profit compared to 2019, boosted by strong trading since
COVID-19 restrictions ended.
Next, which trades from about 500 stores and online,
said full-price sales in the last eight weeks had increased 20%
compared to two years earlier, before the pandemic disrupted
trading. The rise in sales exceeded its expectations.
Shares in the group rose as much as 4%, hitting a record
high of 8,408 pence.
But Next cautioned that "things may not be as good as they
appear today", saying pent-up demand for clothing, record
savings ratios and fewer overseas holidays had boosted sales.
"The impact of these factors must inevitably diminish as
time goes on," it said.
"It also seems likely that increases in the cost of living,
along with the potential effect of seasonal labour shortages on
our delivery service, may moderate demand in the months ahead."
Next said disruption to its supply chain meant stock levels
were 12% down on two years ago. It expects stock to return to
more normal levels by December.
It said prices were about 2% higher this season, driven by
higher shipping costs and mainly affecting larger home products.
Next also expressed concern about warehousing and logistics
staffing for the Christmas period.
"Without the contribution of overseas workers to assist with
these peaks, we suspect customer deliveries may take longer to
arrive as we go into the peak trading season," it said, calling
on the government to relax some post-Brexit immigration rules.
Next made a pretax profit of 347 million pounds ($474
million) in the six months to July, on full-price sales up 8.8%
versus 2019.
It raised its full-price sales guidance for the rest of the
2021-22 year to a rise of 10%, versus up 6% previously, and its
forecast for pretax profit to 800 million pounds, 36 million
pounds ahead of its previous guidance.
Next has proved resilient during the pandemic, benefiting
from its long-established online operations.
Rivals with weaker or no online business, notably Primark
, saw large falls in sales. Others, such as Topshop-owner
Arcadia, and Debenhams have gone bust.
($1 = 0.7311 pounds)
(Reporting by James Davey, Editing by Kate Holton and Edmund
Blair)
