Cold snap boosts pre-Christmas sales at Next

theguardian.com:

Next has upped profit forecasts for the year by £20m after better sales than expected in the run-up to Christmas, but said it remained “cautious” about the year ahead.

The fashion and home retailer said sales had risen by 4.8% in the nine weeks to 30 December, well above predictions of a 2% fall, delivering £66m more sales than expected.

Next said it may have underestimated the dampening on demand of the Omicron variant and shortages of stock in 2021 leading to a bigger-than-expected bounce back this year when shoppers felt able to visit stores more freely and could find the items they want.

In the first Christmas trading update of a large retailer, Next added that sales had boomed once the cold snap arrived in mid December as people stocked up on warmer clothing.

Sales numbers were also improved by inflation with the cost of its clothing up by 8% this spring/summer and expected to be up by 6% in the autumn. The company said inflation was easing as the price of important commodities such as cotton were falling back.

The company now expects to make £860m in profits for the full financial year, up by 4.5% on the previous year.

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However, the fashion group said the year to January 2024 would be tougher, guiding for pre-tax profits to fall by 7.6% to £795m on sales 1.5% lower.