Oct 28, 2020

Next raises profit forecast again as sales beat expectations

UK fashion chain Next has upgraded its full-year profit forecast for the third time this year after sales grew more than expected in the third quarter. The group said it now expected pre-tax profit to be about £365m, up from the £300m forecast at the time of its half-year results in September and ahead of the current £347m average of analysts' estimates calculated by Capital IQ. The forecast is still less than half the £750m of profit Next made in its last financial year, but well above its gloomy forecasts at the peak of the pandemic. In April, the company's most optimistic scenario had sales falling 30 per cent; it is now budgeting for a 17 per cent decline over the full year. Product sales in the third quarter were up 4.8 per cent, with a 23 per cent rise in online sales more than offsetting an 18 per cent contraction in stores. Even before the pandemic, Next made the majority of its sales online.

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