Next PLC (LSE:NXT) said results for last year “exceeded all our expectations” but cut it profit and sales forecasts for 2022/23 on the back of the war in Ukraine and slowing growth.
The fashion retailer predicted the closure of its websites in Ukraine and Russia and a slowdown in other overseas territories will hit profits by £10mln or 1.2% and sales by £85mln or 2%.
An expected £78mln increase in UK retail sales should offset some of the anticipated loss of revenue overseas and in the UK online division, a statement said.
"After accounting for the combination of the loss of £18mln of profit from the closure of our Ukranian and Russian business and the better-than-expected sales in the UK we are reducing our central profit guidance for the full year by £19mln to £850mln," a statement said.
Next flagged in its January trading update five uncertainties that made forecasting difficult for the year, including inflation and the unwinding of pandemic savings.
However, the London-listed company did not factor in war in Ukraine and despite UK sales currently ahead of expectations for the year, it has taken a cautious approach to its forecasting.
For the year ending January 2022, profit before tax was £823mln, a 140% increase from the year before as the company’s online presence helped bypass lockdown restrictions at the start of the year.
Retail sales were up 50% compared to the year prior at nearly £1.5bn, as restrictions were lifted and pent-up demand meant consumers returned to the high street.
Next confirmed a “record earnings per share” according to the statement at 530.8p per share.
The company was also able to reduce its net debt to £600mln, although this is predicted to “rise in line with anticipated profits,” to £620mln.