Next saw full-price sales grow +3.2% YoY in Q2, exceeding the retailer's expectations by £42m (given the "exceptional" summer for clothing retail last year, Next had forecasted that Q2 would be down -0.3%). Sales in the UK (online and in-store) were only slightly ahead of expectations, up +0.4, while overseas sales online were much better than expected, up +21.9%.
In H1, full-price sales were up +4.4% YoY (against guidance of +2.5%), while total group sales, including markdown, subsidiaries and investments, were up +8.0%.
Accordingly, the retailer has increased its profit guidance for the full year by +£20m to £980m, up +6.7% YoY. The profit improvement came from additional sales (£11m) and cost savings (£9m), mainly in logistics, says Next.
Group sales, which includes sales in Next's subsidiaries, were up +8.0% in H1 – additional growth came from the acquisition of FatFace and an increase in the group's shareholding in Reiss, both of which occurred in Q3 last year.
Clearance rates are in line with internal forecasts.
"We are maintaining our guidance for full-price sales in H2 to be up +2.5% versus last year," says Next. "This might seem cautious when compared with the performance in the first half, which was up +4.4%. However, when compared to two years ago, growth in the first half and the forecast for the second half are almost identical."
