British fashion retailer Next has reported a 5 percent year-over-year increase in full price sales in the second quarter, 50 million pounds ahead of the company’s previous guidance.
Excluding Russia and Ukraine, full price sales were up 6.3 percent.
Next is maintaining its full price sales guidance for the second half at a 1 percent increase, while its full year profit guidance has been upped by 10 million pounds to 860 million pounds, an increase of 4.5 percent versus last year.
The retailer has also increased its earnings per share (EPS) outlook to 7.2 percent versus last year.
Return to ‘pre-pandemic norms’
The company said in a release that sales in the first half of the year “were dominated by a sharp reversal of last year's lockdown trends”, and that “sales in retail stores recovered, while online growth reverted back to its longer term trajectory”.
It added: “Many product trends have also returned to pre-pandemic norms. Lockdown winners such as home and sportswear retreated, while formalwear returned to favour. As anticipated, online returns rates and surplus stock also reverted to pre-lockdown levels.”
Full price sales in the quarter were 4.7 percent stronger than expected due to warm and dry weather in June and July and a marked return to formal dressing, perhaps driven by pent up demand for social events.
However, the company doesn’t expect sales performance in Q2 to continue into the second half. Next is maintaining its sales guidance for the remainder of the year at 1 percent since it does not expect a similar weather windfall in the second half.
The company also expects the impact of inflation on consumer spending to worsen in the second half.