Sep 17, 2020

UK clothing retailer Next upgrades profit forecast for second time

Fashion retailer Next has upgraded its profit forecast for the second time this year after reporting more resilient sales than it expected, but still struck a cautious note on second-half trading. The revised profit forecast is slightly ahead of the current consensus among stock market analysts of £287m, but still less than half the £700m the company made in the year to January 2020. Even under its most pessimistic forecast, Next expects to make a profit of £110m for the full year. Its most optimistic outcome is £370m. European clothing retailers Hennes & Mauritz and Inditex, parent of Zara, both earlier this week said they had begun to enjoy a marked improvement this summer after coronavirus sharply depressed their sales earlier in 2020. For the six months to July, the group reported a 34 per cent decline in sales to £1.34bn and pre-tax profit was just £9m. Sales in the stores fell by three-fifths because of the UK's 12-week lockdown, while online sales were down 14 per cent.

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