UK retail giant upgrades profits forecast amid cost-of-living concerns

Shares in the retailer, which operates around 900 stores across the UK, have also surged

High street giant Next has once again elevated its profit forecast, expressing strong confidence ahead of the pivotal Christmas trading season and seemingly dismissing broader worries about consumer finances.

The positive announcement saw shares in the retailer, which operates around 900 stores across the UK, surge on Wednesday morning.

Regarded by many as a crucial barometer for the health of the British high street, Next now projects full-price sales to increase by approximately 7 per cent in the quarter concluding in January.

This marks a significant upgrade from its earlier guidance of 4.5 per cent. However, this revised projection still indicates a modest deceleration when compared to the previous quarter, with the company also anticipating a slight easing in overall UK sales growth.

The upgraded outlook follows a robust period where total full-price sales climbed by 10.5 per cent in the 13 weeks to 25 October, year-on-year.

In the UK, sales were up 5.4 per cent over the quarter, with a 7.8 per cent online increase partly offset by a 2 per cent increase across its shops, surpassing its expectations amid recent warnings over the consumer backdrop.

Next reported that total full price sales grew by 10.5 per cent over the 13 weeks to October 25, compared with the same period a year earlier (PA Archive)

Meanwhile, overseas sales shot 38.8 per cent higher for the quarter.

Next told investors it expects to deliver a pre-tax profit of around £1.135 billion for the year to January, as it hiked its guidance by around £30 million.

This is the latest profit upgrade from the business, after it also raised expectations in July.

Julie Palmer, partner at Begbies Traynor, said: “Next has once again proven why it’s the gold standard in UK retail.

“With guidance lifted and healthy sales growth both at home and abroad, the retail giant’s winning formula of tight cost control, effective stock management and a well-balanced online and store offer is clearly paying off.

“At a time when many retailers are feeling the squeeze from rising costs, weak consumer confidence and uncertainty around the next Budget, Next appears largely immune to such pressures.”