Fashion retailer Next expects full-year profits to be better than forecast after it posted record holiday sales figures, but warned there could be delays in stock levels as a result of the Red Sea attacks.
The company, widely seen as a retail benchmark, then said it expected full-year profits to rise by £20 million (or 4 percent) after reporting strong growth in full-price sales.
This will take the retailer’s profits to £905 million and push its share price up about 5 percent to £84.97.
The growth does not take into account increases from recent acquisitions, including fashion chain Reiss.
However, despite Next’s positive performance, the retailer stressed that a slowdown in the labor market poses a potential risk to consumer spending, as well as concerns that more low fixed-rate mortgage deals will expire, forcing many homeowners to buy at higher interest rates rates. . Prices.
The current situation in the Suez Canal was also mentioned, where Houthi rebels are attacking more and more ships on Yemen’s west coast.
“If problems with access to the Suez Canal continue, they will likely lead to delays in the delivery of supplies at the beginning of the year.”
However, many consumers have seen healthy wage growth—at or above inflation—which could ease recent pressure on the cost of living.
Online sales were the main driver of positive development in the last quarter of last year. The site reported a 9.1 percent increase in sales during the period, compared with just 0.6 percent at stores.
However, sportswear retailer JD Sports reported like-for-like sales growth of just 1.8%, below its forecasts, sending shares down 23% to 119 cents.
The company cited competitors’ more aggressive price-cutting stance as a major factor, as well as warmer weather, which has hit sales of seasonal clothing.
The company said in a statement: “Apparel sales growth was impacted by milder weather from the second half of September, while the peak market season was softer and more promotional than we expected.”
JD Sports chief executive Regis Schultz said the company was making “good progress” towards its five-year plan.
“During this period, we achieved global organic sales growth of 6 percent, against a very challenging year-on-year comparison, and opened more than 200 new JD stores during the year,” he said.
“Our key markets saw an increase in promotional activity during the peak season, reflecting a more cautious consumer, but we continue to increase our market share.”
Source: I News
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