Next has increased its forecasted profits for 2022 by £30m, despite seeing its profit before tax falling 53% year-on-year to £342m for the year ended January 2021.
The decline in profits was driven by store closures throughout “a significant portion” of the period, as total group sales dropped 17% to £3.6bn.
Despite the impacts of Covid-19 restrictions on the retail sector, Next announced that it had reduced its nebt debt during the period from £1.1bn in FY 2019 to £610m.
Moreover, it has raised the firm’s 2022 profit forecast by £30m, from £670m to £700m, due to a 60% increase in online sales for the first eight weeks of FY 2021 compared to two years ago.
Lord Wolfson, chief executive at the company, said that this “overachievement” added to the “expected transfer of sales from retail during the additional two weeks of lockdown” are the reasons behind the optimistic forecast.
Online sales also increased 10% year-on-year to £2.37bn, leading the retail group to further invest in its online channels.
Michael Rooney, chairman at Next, said: “We expect the shift in consumer behaviour towards online sales to continue for some time and one of our priorities during the year has been to continue the development of our online platform.
“We accelerated part of our planned capital expenditure in the online business, spending £121m on warehousing and systems.”