Next PLC (LSE:NXT) often underpromises and over-delivers, and investors will be hoping it repeats that trick ahead of its second quarter trading update next Thursday.
The FTSE 100 fashion retailer maintained full-year profit guidance in the first quarter, with sales boosted by the re-opening of stores as COVID restrictions ended, albeit this was at a lowered range of £795mln to £895mln.
Adversely, however, that did also translate to a slower period for Next's online arm.
To the delight of shareholders, the retailer previously announced that the £220mln surplus in cash will be returned to shareholders in the form of a dividend or buyback, or be used to invest in other companies.
A recent note from Deutsche Bank on the retail sector was less optimistic on Next, downgrading it to 'hold' from 'buy' with its target price cut to 6,250p from 7,850p.
Analysts at the German bank believe retailers are currently too optimistic about the impact of the cost of living crisis, with consumers set to really feel the squeeze.
A positive performance, ahead of its own or analysts expectations, could help the share price, down 15% in the year so far to 6,840p.