Next boosts forecasts after bumper Christmas

Next said sales were boosted by a much colder November than in 2018
Next said sales were boosted by a much colder November than in 2018
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Fashion retailer Next has raised its profit forecast for 2019 after reporting higher than predicted sales in the last two months of the year.

Next said sales were boosted by a much colder November than in 2018 and improved stock availability in both retail stores and online.

The firm managed to shrug off the malaise affecting many retailers to post a 5.2 per cent increase in sales in the last three months of 2019, which was 1.1 per cent ahead of company forecasts.

Full-price sales for the 11 months to the end of December rose 3.9 per cent and the firm predicted sales growth will surpass previous expectations.

It expects sales to be 3.9 per cent higher by the end of the financial year in January 31, up from the previous guidance of 3.6 per cent growth for the year.

Online sales surpassed high street takings. Total sales in retail stores fell 4.6 per cent over the year-to-date, while they were 3.9 per cent lower in November and December.

However, digital sales rose 12.1 per cent in the year-to-date, driven by a 15.3 per cent jump in the most recent period.

Chief executive Simon Wolfson said high street sales were ahead of forecasts before Christmas, although the Boxing Day performance was below expectations.

“We were broadly in line with expectations across the board, but were helped by the weather in November and improved stock availability,” he said.

“We had better sales of our winter clothing products than we expected.

“Boxing Day was disappointing, which was mainly because of the weather. It was raining virtually all day and it was around 5 per cent below expectations, but we shouldn’t exaggerate the impact of that as it was not too dramatic.”

The company expects to post a full-year profit of around £727m, raising its previous forecast by £2m.