Fashion and home furnishings retailer Next has reported a growth in online sales during its fourth quarter as Home sales proved popular.
According to its latest trading update for the nine weeks to 26 December, the sales gained in its Online business compensated for almost all those lost in Retail stores, with total product full price sales down just -0.5%.
Online UK sales rose 36%, while overseas Online sales were up 43%, resulting in total Online sales rising by 38%. Next’s online customer base grew 24% on last year to 8.2 million.
Full price sales were down -1.1% on last year and much better than its central guidance of -8%, given in its October Trading Statement.
Next said that Home, childrenswear, loungewear and sportswear performed well, while stores located in out of town Retail Parks continued to perform around 15% better than those in city centres and shopping centres.
After accounting for the benefit of better sales in November and December and anticipated losses from store closures in January, full year profit before tax is forecast to be £370m before two additional non-recurring items, while year-end net debt is forecast to reduce by £487m to £625m.
For the year ahead (2021/22) Next’s central guidance, which assumes its Retail stores will be closed in February and March, is for profit before tax of £670m.
Commenting on the update, Next added: “The continued uncertainty caused by the COVID pandemic, and its potential economic impact, mean that it is harder than ever to predict sales and profits for the year ahead. So the guidance ranges we are giving for the coming year are wider than usual, but at least give shareholders an understanding of how the profits of the business would respond to different levels of sales growth.
“In addition to the closure of shops, the pandemic has adversely affected the flow of container traffic from the Far East. At present many of our deliveries are running two to three weeks late and we expect this level of disruption to continue into the new year. Our stock levels are currently down -10% versus two years ago (January 2019). We expect stock levels to steadily improve and return to more normal levels by the end of March.”