Next Q3 sales beat expectations, but it maintains existing guidance
Fast-expanding retailer Next delivered a Q3 trading update on Wednesday and brief though it was, there was a surprisingly large amount of detail and it showed how the business continues to be one of the most successful and best-run in the UK fashion sector.
The company said that full-price sales in the 13 weeks to October 30 rose 17% compared to the same period in 2019, or 12.7% compared to a year ago.
Those figures include interest income and excluding that, total full-price product sales rose 18.7% for the quarter and 12.8% for the year to date compared to the pre-pandemic period.
And in the last five weeks, since the update given in the company’s interim results issued in September, full-price sales have risen 14% on a two-year comparison, which is above the firm’s forecast of a 10% increase. That said, it's maintaining its Q4 full-price sales guidance at a rise of 10% with full-year pre-tax profit set to be £800 million.
The firm didn’t give any figures for discounted sales, but looking in a bit more detail at what was behind the figures it did give, it said that Next UK full-price online sales (which includes only Next branded products) rose 21% compared to two years ago, with the year to date up 37%.
Its online Label ops (that is, third-party brands) were up 86% for Q3 and up 73% for the year to date compared to two years ago. Online overseas was up 41% for Q3 and 55% for the year. That means total online sales were running 40% ahead of 2019’s Q3 and the year-to-date was 49.5% ahead.
Clearly, online continues to be the major driver of the company’s sales, while physical retail continues to decline.
In its retail division, which covers its stores in the UK and Ireland, full-price sales were down 6.1% in Q3 and in the year they were down 28.8%, both compared to two years ago. But the big difference between the quarterly and year to date declines does suggest that customers are gravitating back to its stores.
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