Britain’s Next slashes outlook on overseas outlook, Retail News, ET Retail

Representative picture

LONDON: British clothing retailer Next reported a 10% rise in full-year profit but cut its sales and profit forecast for 2022-23, with a strong start to the year in its home market offset by deterioration of the situation abroad.

Next, which trades in around 500 stores and online, said on Thursday it made a pre-tax profit of 823 million pounds ($1.09 billion) in the year to January 2022, in line with forecasts.

But for the year to January 2023, Next forecasts full-price sales growth of 5% and pre-tax profit of £850m, compared to previous forecasts of sales up 7% and profits of 860 million pounds.

Next said the lower sales forecast reflects the closure of its websites in Ukraine and Russia, and moderating growth expectations in some other overseas territories.

So far this year, sales in the UK have been ahead of expectations, mainly thanks to better than expected sales at its retail stores.

Next highlighted a very clear reversal in confinement fashion trends, with a return to more formal dressing and a notable reduction in spending on home and very casual clothing.

The group has shown resilience during the pandemic, benefiting from its long-established online operations.

However, he expressed concern this year that pressures on consumer finances from rising energy, fuel and food prices as well as higher taxes and mortgage rates could reduce discretionary spending on clothing and household items.

He also signaled that a return to spending on overseas vacations and other social activities could dampen demand.

Anne G. Cash