Clothing retailer Next (NXT.L) reported a further surge in sales as shoppers returned to physical stores and turned away from online shopping.
On Thursday, it revealed a 21% increase in full-price sales in the 13 weeks to the end of April, although online sales were down 11% in the period.
The figures highlighted changing shopping habits as COVID restrictions were lifted and stores reopened. Store sales jumped 285% from the same period last year, although they still remained 8% below pre-pandemic levels.
Compared to three years ago, online sales are up 47%. Label, Next’s third-party branded online business, was the best performer online, up 20% year-over-year, or 106% from pre-COVID levels.
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The fashion chain said it remained in good shape for the rest of the year and reiterated its previous forecast.
He sees full price sales for the year rising between 2% and 8%, with profits between £795m and £895m, which would represent a 3% drop at the lower end and growth of 9% at the upper end.
It also did not lower its forecast due to renewed inflationary pressures after previously warning that it would suffer an £85million drop in sales by closing its operations in Russia and Ukraine, which would lead to a fall in profits of £18 million for the year.
Boss Lord Simon Wolfson also previously said the High Street Barometer would increase prices by an average of 3.7% in the half-year to July, but there was no indication that prices would rise further.
Next has also continued to buy back shares, spending £107m so far this year, which will help boost earnings per share growth.
Shares initially rose in London following the news, before trading flat.
“The market was concerned that Next would not be able to meet its sales and earnings targets for the year, and the stock has lagged so far,” said Steve Clayton, selected fund manager. at Hargreaves Lansdown.
“But today’s news appears to have provided the reassurance the market was looking for.”
He added: “Customers seem to accept the price increases imposed by the group, rather than leaving the stores empty-handed. In short, the year is unfolding as the group had planned and while in March Next management threw warnings like confetti, so great were the uncertainties, in May they no longer emphasize on downside risks.
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