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Next has exceeded profit expectations, achieving record-high revenue and profit levels for the year ending January.
The company’s group profit before tax surged to £918 million, marking a 5% increase compared to the previous year’s £875 million. This performance surpassed guidance provided in January by £3 million. Additionally, Next reported statutory profits of £1 billion, largely attributed to a £109 million exceptional gain from the acquisition of premium fashion brand Reiss.
Total group sales experienced a notable 5.9% increase to £5.8 billion, with full-price sales also rising by 4%. Next highlighted that the previous year had outperformed expectations, resulting in its highest-ever revenue and profit levels.
As a key player in British retail, Next’s resilience against economic challenges, including the cost of living crisis and higher inflation, has been commendable. The company has adjusted its profit guidance upward fivefold within the past eight months.
Lord Wolfson, Chief Executive of Next, expressed optimism about the current consumer environment, acknowledging significant uncertainties despite the apparent benign outlook.
Looking ahead, Next anticipates pre-tax profit of £960 million for the upcoming year, reflecting a 4.6% increase. It forecasts underlying full-price sales growth of 2.5% and a 6% rise in total group sales.
The company’s Total Platform service, introduced in 2020, is expected to contribute £77 million to group profit, representing 8% of total profit. Originally designed as a pay-as-you-go service for third-party brands to access Next’s online infrastructure, it has evolved to include strategic acquisitions of minority and majority stakes in brands such as Reiss, Made.com, Joules, and FatFace.
Despite potential disruptions such as stock delays from events like the Suez Canal blockage, Next does not foresee any material adverse impacts on its operations.
Next’s remarkable financial performance underscores its resilience and strategic initiatives in navigating the evolving retail landscape.
