High street giant Next has posted a better than expected Q1 sales performance, buoyed by a mini heatwave in April, with full-price sales up 6% in the 14-week period to 7 May 2018, and it has upped its profit guidance as a result.
The bellwether retailer’s store sales however were down -4.8% over the period but online was up 18.1%. The unusually warm weather in mid-April was welcome news after an exceptionally cold and early Easter and heavy snow in February.
“Sales in the first quarter were better than we expected and around £40m ahead of our internal forecast, boosted in recent weeks by unusually warm weather. This sales over-performance adds around £12m to our full year profit and we are therefore increasing our central guidance for Group profit accordingly,” Next said in a trading update released this morning.
However despite the unexpected good performance in Q1 the retailer pointed out that the results were also flattered somewhat in comparison to a poor performance in the first quarter of last year and that moving forward throughout the rest of the year, that would not be the case.
“At our results presentation in March we set out our guidance for the full year. At that time, we anticipated that the sales performance in the first quarter would be flattered by the under-performance of our ranges in the same period last year, so we did not expect sales for the rest of the year to be as strong as the first quarter. We still believe this will be the case,” Next said.
For the rest of the year the retailer expects to see a +1% growth in sales, leading to an overall +2.2% growth by year end. In terms of profit it has upped its forecast to -1.3% year-on-year, with a pre-tax profit of £717m, compared to previous guidance of -2.9% or £705m in profit.