Enderby retailer Next has seen a strong Christmas with full price sales up 6% versus last year, in the 9 weeks to 28 December, and above expectations of 3.5% growth.
The over-achievement adds £27m to full price sales, and increases the firm’s full year guidance for group profit before tax by £5m to £1.01bn.
Group profit before tax is now forecast to be up 10% versus last year.
In a trading statement the business noted that while growth in the UK was in line with the performance for the rest of the year, online sales growth increased at the expense of growth in retail stores. Meanwhile, sales growth overseas accelerated unexpectedly in the run up to the holiday period.
Looking ahead, for the next financial year Next expects full price sales to increase by 3.5% and profit before tax to be up 3.6%.
The company is anticipating sales and profit growth in the year ahead despite a £67m increase in wage costs (driven by general wage inflation, the increase in the National Living Wage (NLW), the decrease in Employer National Insurance (ENI) threshold, and the increase in the ENI headline rate), which it is looking to offset through a combination of operational efficiencies and other cost savings and a 1% increase in prices on like-for-like goods.
