Following today’s release of Next quarter figures for the 2022/23 financial year;
Emily Salter, Senior Apparel Analyst at GlobalData, a leading data and analytics company, provides her perspective: “Next’s momentum continued in its second quarter of fiscal year 2022/23. with total full-price sales up 5.0%, an impressive 25.5% increase over last year’s pandemic levels as consumers flocked to stores and demand for its core proposition online multi-brand remained strong.The retailer’s full-price sales growth was 4.7% higher than expected, which it attributes to unusually warm June and July demand for summer clothing as consumers have refreshed their wardrobes and formal wear is back with a summer of weddings after two years of canceled events.Despite this better than expected performance, Next maintains its full-price sales growth forecast. n for the second half of 1.0%, as the effects of inflation on consumer spending will worsen, although it is well positioned to deal with it due to the presence of more essentials. categories and a wide range of prices. Next also raised its profit forecast for the financial year this morning by £10m to £860m, equivalent to 4.5% year-on-year growth, indicating that it effectively manages rising costs throughout the supply chain.
“During its second quarter, Next saw a reversal in trends related to COVID-19, with better-than-expected in-store sales; sales of categories that excelled during the shutdowns, such as activewear and home goods, declined; and formal wear has grown in popularity. Additionally, after two years of suppressed return rates, Next’s has reached pre-pandemic levels. Unlike many online pureplayers who are struggling with unusually high return rates, such as ASOS and boohoo.com, Next’s was only 1ppt higher in the first half of FY2019/20, due the important role of its stores and the fact that it has always charged for returns, shaping the behavior of its online shoppers.
“Despite all of this, long-term trends will persist, with sportswear and casualwear set to prevail again, and online continuing to outperform stores. On a three-year comparative, online and retail sales increased respectively of 44.4% and 4.7%, highlighting the clear trajectory of its two channels. In fact, Next did not expect its in-store sales to be above pre-COVID levels, but it will have benefited of the closure of the stores of its competitors, in particular Marks & Spencer and Debenhams.