Next has reported a H1 performance ahead of expectations, with brand full-price sales up +12.4% YoY, and a profit before tax of £401m (up +16% YoY).
However, due to a slow start to H2 and the difficulty of gauging the likely effects of the Government's new economic stimulus package, the retailer has revised its expectations, reducing its forecast for full price sales in the H2 from +1% to -1.5% YoY, and reducing its profit guidance for the full year from £860m to £840m (up +2.1% YoY).
Next says its priorities are to achieve better efficiencies in operations and online, increase the profitability of its fastest-growing segments, and seek new supply sources to help mitigate sterling devaluation.
Next says currency devaluation is set to drive inflation next year, yet factory gate prices are stabilising and, in some cases, dropping. Its shop prices in H2, on LFL items, will be up +8% YoY (+13% on Home goods).
The retailer expects to close 16 mainline stores this year, while opening six new Clearance stores.