The group will be one of the first big names out of the starting blocks with its Christmas trading update, ahead of a flood of similar stock market announcements.
Next has proven to be a resilient performer as the high street struggles with the economic fallout from the coronavirus crisis, lockdowns and competition from online rivals such as Asos and Boohoo.
At the start of November, the fashion and homewares chain posted a double-digit jump in sales, but cautioned that stock availability remained “challenging” amid supply chain issues and labour shortages.
The group reported third-quarter sales up 17 per cent versus two years ago after a better-than-expected recent performance, though it still forecast growth to slow to 10 per cent over its final quarter.
It said this was down to a lessening of pent-up demand, while growth was also set to be hampered by supply issues, with disruption ongoing despite recent improvements.
Next added that rising inflation was likely to hit demand for more discretionary purchases as households tighten their belts.
The group raised its full-year sales growth outlook to 11 per cent from the 10.7 per cent previously forecast, but kept its annual profit guidance at £800 million. That compares to £342m in the pandemic-hit 12-month period to January 2021 and £749m in the year to January 2020, analysts at investment firm AJ Bell noted.
Ahead of Thursday’s expected trading update, the analysts said: “However, Omicron has reared its head since the last trading update in November and issues such as wage inflation, raw material inflation and shortages in haulage have impacted the performance of other retailers, whose online model has also been pressured by higher product return rates.
“It will be interesting to see if [Next chief executive] Lord Wolfson and his team flag any of these issues and whether they are having any impact on margin and profits.
“Analysts and shareholders will also look out for an update on the plans to return what Next terms excess cash to investors.
“Alongside that second-quarter trading statement Next announced a plan to return £240m to investors. The FTSE 100 firm paid out £140m - or 110p a share - on September 3 and said it would pay out the rest - £100m or around 78p a share - following the Christmas trading update, assuming all was going to plan.
“Next has also noted that it would then look to resume ordinary dividend payments in the year to January 2023, when analysts and shareholders may also ponder the resumption of share buybacks as well.”
At its half-year results in September, the retailer warned over price hikes due to supply chain disruption and said staff shortages could impact its deliveries in the run-up to Christmas.
Next said some areas of the business were starting to come under pressure from a lack of foreign workers, particularly in logistics and warehousing, which may affect its delivery service going into the peak festive season.