Next sales rise despite online shopping slump

A logo of clothing retailer Next is seen at a store in London, Britain

Next said it remained in good shape for the rest of the year and reiterated its previous guidance. Photo: Reuters/May James

Clothing retailer Next (NXT.L) has reported another rise in sales as shoppers returned to physical high street stores and shifted away from online purchases.

On Thursday it revealed a 21% increase in full-price sales in the 13 weeks to the end of April, although online sales were down 11% during the period.

The figures highlighted the shift in shopping patterns as COVID restrictions lifted and stores reopened. Store sales surged 285% compared to the same period last year, though they still remained 8% behind pre-pandemic levels.

Against three years ago, online sales were up 47%. Label, Next’s third-party branded online business, was the best online performer, rising 20% year-on-year, or 106% against pre-COVID levels.

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The fashion chain said it remained in good shape for the rest of the year and reiterated its previous guidance.

It sees full price sales for the year growing by between 2% and 8%, with profits between £795m and £895m, which would represent a decline of 3% at the low end and growth of 9% at the upper end.

It also did not downgrade forecasts as a result of further inflationary pressures after previously warning it would take an £85m hit in sales by shutting its operations in Russia and Ukraine, hitting profits by £18m for the year.

Boss Lord Simon Wolfson also previously said the high street bellwether would increase prices by an average of 3.7% over the half-year to July, but there was no suggestion that prices would rise any higher.

Next also continued to buy back shares, spending £107m so far this year, which will help to boost earnings per share growth.

Shares initially rose in London on the back of the news, before trading flat.

“The market had been fretting that Next would not be able to reach its sales and profit targets for the year, and the stock has been a laggard year to date,” Steve Clayton, select fund manager at Hargreaves Lansdown, said.

“But today’s news looks to have provided the reassurance the market was looking for.”

He added: “Customers look to be accepting the price increases the group are putting through, rather than leaving the stores empty-handed. In short, the year is unfolding as the group had planned and whilst back in March Next management were throwing caveats around like confetti, so great were the uncertainties, come May they are no longer stressing the downside risks.

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