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Next has increased its full year profit before tax guidance by £20m to £860m, as sales in the Christmas period have been “better than anticipated”.
The retailer’s profit outlook has seen an increase of 4.5% compared with last year, following a 4.8% rise in full price sales in the nine weeks to 30 December 2022 compared with the same period last year.
Going off this profit guidance, the group’s Earning Per Share (EPS) would stand at 567.2p, which dictates an increase of 6.9% compared with the previous year.
In addition, the retailer now expects the cost price inflation on like-for-like goods to peak at around 8% in the Spring Summer season, with inflation expected to be “no more” than 6% in the second half.
According to the company, it estimates that it will return £220m of surplus cash to shareholders by way of share buybacks in the year ahead after paying ordinary dividends. These buybacks, along with those in the current year, will supposedly boost pre-tax EPS by 2.7%
Despite this, Next “remains cautious” in its outlook for the year ahead, as initial guidance for the year ending January 2024 is for full price sales to be down 1.5% and profit before tax to fall to £795m by 7.6% compared with the current year.
