Next sales better than expected but boost at risk of lockdown wipeout

Retailer Next has said festive sales were better than expected but warned the trading boost would be “almost entirely” wiped out by the third English lockdown.

The fashion and homewares chain said it now expec ts pro- rata 52-week annual profits of £370 million for the year to the end of January, against £365m previously pencilled in. Profits on a 53-week basis will be hit further by a £40m property provision and are expected at £342m.

The group said fullprice sales over the nine weeks to December 26 fell 1.1%, which was better than the 8% drop it had been braced for and came despite tighter restrictions.

Profits were on track to hit £ 393m before the latest lockdown, with lost sales in January set to cost it £18m.

The group warned that total full-price sales were

set to tumble by 14% in January, which will leave full-year sales 16% lower.

It has also taken a £ 5m hit from higher costs of switching its end-of-season sale online.

The group said: “Profit gained from the overperformance in November and December has been almost entirely offset by the anticipated loss of full price retail

sales in January due to the lockdown closure of 90% of our stores and the additional costs we have incurred clearing more of our retail end-of-season sale stock online.”

Ne x t is forecasting profits of £670m for 202122, with sales remaining flat on the pre-pandemic year thanks to an expected recovery in the final six months of the year.

The final six months of 2021 could be bright for Next.