Following today’s release of Next’s figures for the 13 weeks ending 29th July 2023; Emily Salter, lead retail analyst at GlobalData, a leading data and analytics company, offers her view: “Next has continued to surprise in 2023, with it releasing an unscheduled trading update in mid-June when it revised its FY2023/24 guidance from a 1.5% decline in sales to a 1.4% rise, and this morning it lifted this further to 1.8% after its full-price sales rose by 6.9% in Q2. The retailer saw an impressive 9.3% growth in sales in the first seven weeks of the period as summer finally arrived in the UK and some consumers felt the impact of annual salary increases on their disposable incomes. The wet July put a slight dampener on Next’s sales, with full-price sales up a more muted 3.7% in the final six weeks of Q2. This will have disproportionately affected instore sales, but Next’s presence across a range of locations will have helped protect it, with retail sales rising by 2.2%. The retailer also reported having a good summer sale as consumers were keen to snap up items at lower prices, boosting its profits and contributing to it raising its FY2023/24 profit guidance from a decline of 4.1% to a 2.9% fall.
“The resilient performance demonstrated by Next is indicative of that of the wider clothing & footwear market, but its wide range of brands that straddle value to premium price points, leading online proposition and well-established credit offer have allowed the retailer to benefit from consumers’ continued propensity to spend. However, GlobalData forecasts that the clothing & footwear market will grow by 5.7% in 2023, so Next is set to underperform – with it currently expecting its full-price sales to rise by 1.8% in its FY2023/24, but if its second half is anything like the first, Next may exceed this forecast as it is renowned for being conservative in its outlook.”
