Next has revealed better than expected results over the Christmas period despite a 9.2% decline in sales across its bricks-and-mortar stores. However the decline was better than the 13% drop that was forecast by analysts and overall Next reported a 1% rise in full product sales between 28 October to 29 December thanks to a 15.2% rise in online sales.
The retailer said strong sales in the three weeks prior to Christmas along with a good half‐term holiday week at the end of October “made up for disappointing sales in November”.
Additionally Next revealed its preliminary full-year results and said it expected full-price sales growth of 3.2%, in line with the guidance announced in September. The clothing retailer added guidance for its full-year profit was now £723m, 0.6% lower than its previous guidance of £727m.
It attributed the £4m difference to higher sales on seasonal products, such as personalised gifts and beauty products which have lower profits margins when compared to clothing ranges and higher operational costs from the volume of online sales.
For the year ahead Next said it expected a “similar economic environment” as that experienced in the second half of 2018 and estimated retail sales to be down 8.5% and online sales to be up 11%.
In the statement however the company added that “any sales forecast made in January comes with a high degree of uncertainty”. It said: “This year uncertainty around the performance of the UK economy after Brexit makes forecasting particularly difficult. We have not factored into our sales estimates the potential benefits of a smooth transition or the downsides of a disorderly Brexit.”