Next PLC (LSE:NXT) delivered full-year profit ahead of guidance, boosted by higher margin retail sales and a better end-of-season sale.
Pre-tax profit for the year to 31 January 2023 of £870mln was 5.7% higher than the previous year, 16.3% higher against pre-pandemic 2019/20 and £10mln higher than the previous guidance of £860mln.
The FTSE 100-listed firm said full-price sales in January were flat and in line with guidance but higher margin retail sales were greater than expected, adding £5mln to profit while another £5mln lift came from better-than-expected clearance rates in the end-of-season sale.
The Leicester-based retailer said trading sales totalled £5.15bn, up 8.4% from £4.75bn in the previous financial year with full-price sales up 6.9% versus 2021/22 and 20.5% against 2019/20.
This was driven by a strong performance in retail where sales jumped 30% to £1.87bn while online sales dipped 2% to £3.07bn. Next said full-price sales in the last eight weeks were down 2.0%.
Basic earnings per share reached a record 573.4p , up 8.0% versus 2021/22 and 21.4% versus 2019/20.
Next maintained its guidance for the current financial year for both sales and profit. It expects full-price sales to be down 1.5% versus last year and profit before tax to be £795mln.
Selling price inflation is forecast to be more benign than previously thought. Like-for-like price inflation in Spring/Summer is expected to be +7% and +3% in Autumn/Winter (previously +8% and +6% respectively).
The company expects performance in the first half of the year to be weaker than in the second half.
This is because, in the first half last year, unusually warm summer weather coincided with the release of pent-up demand for summer events after the pandemic.
Next paid a final dividend of 140p, taking the total for the year to 206p. It intends to maintain this level of payout in the current financial year as well as return £200mln via share buybacks.