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Next increases FY guidance as online boosts sales

Next has upped its full-year guidance by £10 million after a solid sales performance in its second quarter.

The high-street retailer reported an increase in full-priced sales of 4% in Q2, while full-priced sales in the first half of the year increased 4.3%. Meanwhile, total sales over the 26 weeks to 27 July 2019 were up 3.8%.

But online was the success story, with a 12% boost in eCommerce sales over Q2, resulting in an 11.9% year-on-year increase over the half-year period.

The retailer has increased its full-year profit guidance by £10 million to £725 million, resulting in a spike its share price.

Sofie Willmott, lead retail analyst at GlobalData, said: “Ongoing channel polarisation is evident and we forecast that Next’s online channel will have overtaken stores in H1.”

But Willmott noted that the shift to online is slowing and Next will have to continue to focus on its full-price retail sales and its store proposition.

“Next has worked hard to improve the appeal of its stores, adding coffee shops and concessions to create interest while also driving footfall by offering one hour click & collect and partnering with Amazon by acting as a collection point,” she explained. “Although these initiatives are not enough to reverse the trend of falling footfall, they are going some way to slow the decline and other retailers should take note of Next’s creativity and willingness to trial ideas.”

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