Next profits fair better than expected in first quarter 2023

04/05/2023

NEXT plc has announced a first quarter trading statement for the thirteen weeks to 29 April:

  • Full price sales were down 0.7% versus last year, moderately ahead of Next’s guidance which was to be down 2%
  • Full year guidance is unchanged. Next still expects profit before tax of £795m, down 8.7% on last year

Charlie Huggins, manager of the ‘Quality Shares Portfolio’ at Wealth Club, commented:

“This is another solid update from the bellwether of the UK High Street. Sales have fallen by less than expected, and although Next hasn’t increased its full year guidance, this seems to be borne more out of prudence than anything else. 

The current retail environment is sorting the wheat from the chaff. On the one hand you have the likes of Superdry, Boohoo and Asos which are really struggling, not to mention countless other retailers that have gone bankrupt. At the other end of the spectrum are the likes of Next and Primark, which appear to be getting stronger. 

Next’s strength is allowing it to snap up weaker rival’s brands (like Made.com) at knock-down prices and plug them into its online distribution network. By offering these brands, Next expands choice for customers and gives them even more reasons to keep coming back.

Overall, Next is doing everything investors could ask of it in a difficult retail environment. Economic pressures could yet worsen as higher interest rates really start to bite. But that won’t worry Next too much. It looks to be in a much stronger position than rivals to weather any storm.”

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