Next to spring out of starting block with festive trading update
Next’s strong online business will prove to have been a godsend when the retail stalwart updates investors on trading this week.
The fashion firm will be the first big name to provide an insight into its festive fortunes amid coronavirus lockdowns and trading restrictions across swathes of the UK.
Next has increased its profit forecast for the year to January 2021 no fewer than three times, although the increased number of lockdowns could put an end to that winning streak, even allowing for the firm’s online prowess.
Chief executive Lord Simon Wolfson flagged that a two-week closure of non-essential retailers would lop 6 per cent off full-price sales.
Russ Mould, investment director at AJ Bell, said: “Better-than-expected full-price sales, lower-than-expected returns and good cost control (thanks to 13 store closures and rent renegotiations designed to save £10 million a year across 60 other sites) mean Next has raised the mid-point for its pre-tax profit forecast from zero to £195m to £300m and now to £365m – although the range of possible outcomes remains wide.
“Analysts will also look for an update on the acquisition of a controlling stake in Victoria’s Secret from L Brands and chatter that the company is looking at purchasing certain assets from Sir Philip Green’s fallen Arcadia group, notably Topshop and Topman.
“Any comments on Brexit will also be of interest considering the Christmas Eve deal between London and Brussels, especially as Next had flagged bottlenecks at ports such as Dover as a potential risk, albeit a manageable one.”
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