In a trading statement covering Q1 (the 13 weeks to 29th April), Next has revealed that full price sales were down -0.7% YoY, moderately ahead of expectations (-2%).
Total trading sales, including markdown and Clearance sales, were up +1.2% YoY, driven by higher clearance sales. Online sales were down -1.6% YoY, and in-store sales -0.6%.
The business says it is maintaining its sales and profit guidance for the full year, with profit before tax forecast to be £795m. To maintain its H1 forecast, Next has moderated its sales forecast for the Q2, which is now planned to be down -5% YoY (previous guidance was -4%). "The second quarter last year benefited from unusually warm weather and pent-up demand for events such as weddings, proms, etc," the retailer explains.
Julie Palmer, partner at independent business recovery specialist Begbies Traynor, comments: “On the face of it, this morning’s update from one of our best-known retailers is another example of the ailing high street. But with inflation still running at over 10%, Next’s Q1 performance shows just how resilient this bastion of our high street is.
“The decline in total full-price sales is more modest than first forecast, and while sales for the first half are now expected to decline by nearly -5%, total sales are still up YoY as the retailer benefitted from higher clearance sales as stock levels returned to pre-pandemic levels over Christmas.
“Elsewhere, retailers up and down the country are coping with a cost of living crisis that’s seeing consumers tighten their purse strings, but Next has maintained guidance, which is a very credible performance given the current environment.”
