Fashion retailer has maintained its guidance for annual profit after reporting a smaller decline in first-quarter sales than it expected, saying it was too early in the year to change its outlook.
UK consumers have been squeezed by inflation that hit a 41-year high of 11.1% in October and has remained in double digits since, including March’s stronger-than-expected reading of 10.1%.
Next trades from about 500 stores and online and is considered a good barometer of how British consumers are faring.
It said today that full price sales fell 0.7% in the 13 weeks to April 29, better than its guidance for a 2% fall.
“Although our first quarter performance moderately exceeded our sales guidance, we believe it is too early in the year to alter our overall sales expectations for either the half or full year,” Next said.
It stayed cautious, forecasting a 1.5% decline in 2023-24 full-price sales and pretax profit of £795m, down from the £870.4m made in 2022-23.
Next forecast a 5% fall in second quarter full price sales, noting the same period last year benefited from unusually warm weather and pent-up demand for events such as weddings.
It also said some of the first quarter’s success, particularly in holiday clothing sales leading up to Easter, may have been pulled forward from the second quarter.