Next raises profit forecast, but warns of store closure impact

Next has reported online sales up 23.1 per cent in the third quarter, against a 17.9 per cent fall in retail sales.

The fashion and home retailer - which now sells more than half of its products online - said overall sales were better than expected, at 2.8 per cent during the three months to 24 October, compared with the same period a year ago.

The business raised its full-year profit forecast to £365 million - £65 million more than forecasted in September - but warned of uncertainty around fourth quarter trading due to fears of forced store closures across the UK.

"A two week lockdown in England, Scotland and Northern Ireland in November would reduce Retail full price sales by around £57 million (depending on timing), representing 17 per cent of retail full price sales and six per cent of the group’s full price sales in the quarter," read the statement.

As for Brexit though, Next stated that it was well prepared and has "set up all the administrative, legal and physical infrastructure" needed to operate effectively at the end of the current transitional arrangements.

Commenting on the results, LiveArea's EMEA commerce consulting director Elliott Jacobs said that while other retailers have been forced to make large-scale changes to adapt to changing consumer behaviour, Next is benefitting from previous investments in its digital infrastructure, as well as solid back-end capabilities and a well-oiled supply chain.

“Add to this a strong network of loyal customers and it’s easy to see why Next has driven such considerable success - brand loyalty is now more prominent than ever as consumers are less inclined to purchase from unfamiliar brands.

“While the next few month will undoubtedly be challenging for the industry, Next’s previous digital investments put the retailer ahead of the pack and has set itself up for a strong trading period this Golden Quarter," he added.

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