There must be a plaque in Next’s boardroom that says, ‘Always under-promise and over-deliver’ and true to this word the retailer has once again delivered a better-than-expected trading update. But celebrations may only extend to a cupcake rather than champagne as the company has a typically cautious view of the near-term.
AJ Bell’s Russ Mould said: “Next is essentially saying that 2021’s best trading conditions are already behind it, and that the final few months of the year could be a hard slog.
“There are plenty of reasons to justify this cautious tone. Family finances are coming under pressure from the higher cost of living and expectations of a near-term rise in UK interest rates could put a further squeeze on anyone with variable-rate borrowings.
“Supply chain issues are still a key risk with regards to stock availability. Its shops are looking well stocked but there remains the risk that Next doesn’t have everyone’s desired clothing size.
“The extra profit it has made in the past five weeks, beyond that originally forecast, will be gobbled up by costs related to marketing and transportation, hence why it isn’t raising full year profit guidance after a bumper third quarter.”
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