Next profit boost will be ‘short lived’

British fashion retailer Next has increased its central guidance for full year pre-tax profits by £20 million to £270 million, following the reopening of UK retail shops in April.

Across the 13 weeks to 1 May, the company reported a full price sales decline of 1.5 per cent compared to pre-pandemic levels.

Next said that these figures had beaten its previous predictions of a 10 per cent drop in sales, which meant an extra £75 million sales for the retailer.

However, the company warned that the post-lockdown surge would be “short lived” and that sales will settle back down to guidance levels within the next few weeks.

With this in mind, the retailer has kept its sales guidance as up 3 per cent against 2019.

Next said it has maintained the assumption that retail will be down 20 per cent, while online will increase by 24 per cent.

"We're not getting too excited about that because after each of the last lockdowns we did see a spike in demand that petered away after a few weeks," Next chief executive Simon Wolfson told Reuters. "What we're seeing at the moment is pent-up demand that I don't think is necessarily indicative of what is to come."

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