Royal wedding fever and the Easter sun helped Next post a surprise jump in sales and saw the clothing retailer raise profit forecasts for the full year.
Sales at Next rose 5.2 per cent in the 13 weeks to April 30 year on year, which was "significantly better than expected", management said yesterday.
Its chief executive, Lord Wolfson, said the company particularly benefited from a spending spree by women in the run up to the Royal Wedding.
"I think people bought clothes for the big day," he explained. "Many had parties to go to and they bought clothes for those events."
The performance prompted the company to lift its profit guidance for the year from a range of between £520m to £570m up to £535m to £585m. Next also pointed to the Easter heatwave as well as its better ranges and improved stock availability on best-selling lines. Aggressive marketing, improved delivery service and more stock available also helped sales in its online Directory business, it said. There was, however, an "adverse" effect on sales of homewares. John Stevenson, an analyst at Peel Hunt, said: "A late Easter and warm weather is a non-big ticket retailer's dream scenario." Yet he cautioned: "While a strong start, the pressures on consumers and disposable incomes remain, with the April boost a positive foil to March's weakness, but not indicative of the year ahead."
Next remained cautious about the company's prospects, dampening hopes that the strong, first-quarter performance would continue into the next quarter as many will have brought forward their summer spending.
However, Lord Wolfson did point out that the commodity cost pressures, especially the cost of cotton, appeared to be easing.Reuse content