Jul 31, 2019

Next raises forecasts after strong second quarter

British retailer Next has raised its forecasts for sales and profits this year after a far better performance in the second quarter than it had expected, driven by a sharp rise in online sales. Next upped its full-year profit guidance by £10m to £725m, a rise of 3.6 per cent on the prior year, and its full price sales guidance from 1.7 per cent to 2.6 per cent. The revisions come as the retailer reported second quarter full price sales rose 4 per cent, a significant beat of the gloomy 0.5 per cent fall it had forecast when it reported in May. The results once again neatly illustrated the gap between the fortunes of bricks and mortar and online businesses. Next's retail sales fell 4.2 per cent in the quarter, while its online sales - a key part of the business after it moved its long-running Next Directory catalogue online - jumped 12 per cent. Next had a particularly strong July, when sales rose 7 per cent, but it cautioned this "Overperformance" came from the effects of its end of season sale, which it does not expect to mirror in the rest of the year.

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