UK fashion brand Next has reported a 38% surge in total online sales in the fourth quarter, as shoppers deserted the high street amid the coronavirus lockdown.
Full price sales in the nine weeks to 26 December were down 1.1% on last year, which the FTSE-100-listed firm said was much better than its central guidance of -8%, given in its October Trading Statement.
Next said its bestselling items came from its childrenswear, home, loungewear and sportswear lines; whilst the worst performing areas were unsurprisingly adult clothing for work, parties, events and going out.
With the lockdowns keeping consumers away from shops, Next’s high street sales plunged 43% for the period.
Next and COVID uncertainty
“The continued uncertainty caused by the COVID pandemic, and its potential economic impact, mean that it is harder than ever to predict sales and profits for the year ahead”, the company wrote in its trading statement.
“So the guidance ranges we are giving for the coming year are wider than usual, but at least give shareholders an understanding of how the profits of the business would respond to different levels of sales growth.”
After accounting for the benefit of better sales in November and December and anticipated losses from store closures in January, full year profit before tax is forecast to be up slightly at £370m, Next said.
For the year ahead (2021/22) Next’s central guidance, which assumes our Retail stores will be closed in February and March, is for profit before tax of £670m, based on full price sales being flat versus two years ago
The firm said its year end net debt is also forecast to reduce by £487m to £625m.
No Brexit impact
Next also said it had not experienced any disruption as a result of Brexit and all its new systems required for Brexit have been implemented and are now operational.
“We do not anticipate that Brexit will have a material impact on our ability to import and export stock in the year ahead”, it said.
Next’s shares rallied 7.4% to £74.26 in London trading on Tuesday morning.