(Alliance News) - Next PLC on Tuesday said it expects to report a lower profit for its recently ended financial year due to anticipated losses from closed stores, despite a rise in online sales.
Next's pretax profit for its financial year finishing at the end of January is set to be GBP370 million, which would be down 38% from GBP593.9 million the prior year.
The clothing and homewares retailer said the GBP370 million forecast is slightly higher than its GBP365 million guidance issued back in its October trading statement, which was increased from its GBP300 million guidance issued a month earlier.
"After accounting for the benefit of better sales in November and December and anticipated losses from store closures in January, full year profit before tax is forecast to be GBP370 million before two additional non-recurring items," Next said. A non-recurring profit of GBP12 million from a fifty-third week and an additional property provision worth GBP40 million results in a full-year pretax profit forecast of GBP342 million.
"For the year ahead (2021/22) our central guidance, which assumes our retail stores will be closed in February and March, is for profit before tax of GBP670 million, based on full price sales being flat versus two years ago," it added.
Looking ahead, Next said its upside scenario for the 2022 financial year is pretax profit of GBP735 million, with its downside forecasting profit of GBP600 million.
Promisingly for Next, full price sales in the nine weeks to December 26 were down just 1.1% from the prior year, measuring up favourably to the retailer's central guidance of an 8% decline.
Online sales in the UK were up by 36% during the period from the previous year, with online overseas sales up by 43% and retail down 43%, due to the closure of stores during the national lockdown in November 2020. Next said the sales gained in its online business compensated for almost all those lost in its retail stores, with total product full price sales down just 0.5%.
Shares in Next were up 8.0% at 7,462.00 pence in London on Tuesday.
By Zoe Wickens; zoewickens@alliancenews.com
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Next (NXT)
