Full price sales were up 3.2% on last year and total sales rose 5.4%, whilst profit before tax increased by 4.8% to £420 million.
Next has increased its full year sales and profit guidance again. It now expects a full year profit before tax of £875 million, versus its prior guidance of £845m, which would represent an increase of 0.5% on the prior year.
Charlie Huggins, manager of the ‘Quality Shares Portfolio’ at Wealth Club said, “Next has pulled another rabbit out of the hat today, leading to a further upgrade to its full year sales and profit guidance.
UK consumer spending appears to have defied gravity. A strong employment market and rising wages have helped cushion inflationary cost pressures, meaning consumers have continued to spend, despite the gloomy economic headlines.
Not all retailers have benefited, as the travails of Wilko show. Next has capitalised by doing the simple things well. Once again its operational execution continues to outshine almost all of its competitors.
Looking ahead to 2024, the outlook for sales growth is uncertain, with a softening in the labour market having potential to dampen growth in consumer demand. However, cost pressures are expected to ease significantly, which should be good news for profit margins.
Overall, this is an excellent set of results from Next. The UK economy may have held up better than most expected, but it has still presented immense challenges. Next has executed brilliantly, reinforcing its reputation as one of the best run retailers.”