Optimism surrounding Next PLC (LSE:NXT) has surprised analysts at Shore Capital, which believe the solid Christmas performance could be the calm before the storm.
FTSE 100 retailer Next pleasantly surprised last week when it raised pre-tax profits guidance to £860mln, albeit this was in line with what was set out last year.
Going into 2023, the broker believers Next has several moving parts to deal with, including supply chain pressures and business rates, although the main concern remains inflation, and when it is expected to peak.
Read more: Next enjoys strong Christmas, with sales ahead of forecast, but warns of lower profits ahead
Next may also be weighed down with employment issues, with the analysts believing recent layoffs in tech and e-commerce could spread into retail.
Looking ahead, analysts think the upcoming financial year “will be a year of higher execution risk as the retailer works through the integration of businesses recently acquired and repurposes it Total Platform after realising its difficulty in commercialisation.”
Shore Capital kept its 'hold' rating on the stock.