Investment accounts
Adult accounts
Child accounts
Choosing Fidelity
Choosing Fidelity
Why invest with us Current offers Fees and charges Open an account Transfer investments
Financial advice & support
Fidelity’s Services
Fidelity’s Services
Financial advice Retirement Wealth Management Investor Centre (London) Bereavement
Guidance and tools
Guidance and tools
Choosing investments Choosing accounts ISA calculator Retirement calculators
Share dealing
Choose your shares
Tools and information
Tools and information
Share prices and markets Chart and compare shares Stock market news Shareholder perks IPOs and placings
Pensions & retirement
Pensions, tax & tools
Saving for retirement
Approaching / In retirement
Approaching / In retirement
Speak to a specialist Creating a retirement plan Taking tax-free cash Pension drawdown Annuities Investing in retirement Investment Pathways
Next lifts profit guidance after £38m Christmas sales boost
(Sharecast News) - UK fashion retailer Next lifted annual guidance for the fifth time in seven months after full-price sales came in a massive £38m more than expected during November and December, but warned that attacks on shipping in the Red Sea could cause supply delays. Full-price sales in the nine weeks to December 30 rose 5.7% year-on-year, 2% higher than previous guidance.
Annual pre-tax profit guidance increased by £20m to £905m. Of that £17m came from the sales beat to date and £3m from an upgraded forecast for full-price sales in January. The group also forecast a 6% rise in sales and profit up 5% for 2024/25.
Improvements to Next's online service resulted in sales rising 9.1% in the three months to the end of December. In-store sales rose by 0.6% after a fall in the prior quarter.
"Cost price inflation in our own products is diminishing, mainly as a result of decreasing factory gate prices. We believe that this will allow us to maintain zero inflation in selling prices, along with a small increase in bought in gross margins. This will be the first time in three years that input prices have been stable," the company said on Thursday.
However, it also warned of possible delays to stock deliveries in the early part of the year if attacks on shipping in the Red Sea by Iran-backed Yemeni Houthi militants force container vessels to avoid the Suez Canal.
"The largest cost increase will be wage inflation, which we expect to be around £60m. Within this, around £25m is the difference between the expected rate of general UK wage inflation, and the rise in the National Living Wage." Next also noted consumers may curb spending as higher interest rates hit those coming off fixed mortgages.
In order to mitigate against some of the cost increase, Next said it planned to recover around £17m by increasing bought-in gross margin by +0.4%, but did not anticipate that selling prices would increase in the year ahead.
Next said it expected to generate around £600m of operating cash flow, from which £250m would be paid in dividends and £275m returned via share buybacks in the year ahead. The remaining £75m would be used to cut debt.
Reporting by Frank Prenesti for Sharecast.com
Share this article
Related Sharecast Articles
Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.
Award-winning online share dealing
Search, compare and select from thousands of shares.
Expert insights into investing your money
Our team of experts explore the world of share dealing.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity and Inclusion | Doing Business with Fidelity | Fidelity gender pay report | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Security | Statutory and Regulatory disclosures | Whistleblowing policy
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.