Fashion retailer Next has lowered its profit guidance by £10m after it stopped online sales in Ukraine and Russia.
The high street name also shrunk its sales guidance for the 2022/2023 year by £85m, a two per cent dip.
In results published on Thursday, it anticipated its full price sales would rise five per cent and group profits would hit £850m, up 3.3 per cent.
An improved outlook for UK retail sales would mitigate the expected loss of lower margin sales overseas and the associated cost of increased markdown, Next noted. The closure of its Ukrainian and Russian businesses was forecast to come at an £18m loss to profit before the UK’s performance was factored in.
It marked pre-tax profit of £823m, a 140 per cent rise on the year prior, for the year to January 2022. Brand full price sales were boosted 32 per cent against the previous year.
The retailer said its performance last year had exceeded expectations, despite several months of physical retail closures due to Covid lockdown.
Prices would increase by an average of eight per cent, the firm revealed.
There has been a “very sharp reversal” of lockdown fashion trends, with shoppers ditching casual clothes for more formal options once more.
“We’re seeing a return to pre-pandemic trends,” Next boss Lord Wolfson told CityA.M. on Thursday afternoon.
Shoppers were also hunting for more investment pieces and picking up fewer cheaper items, Wolfson added.
The CEO said the company was assuming its Ukraine operation would remain closed for the rest of the year.
Wolfson said he did not want to “get into the whys and wherefores” of how long its Russian site may remain shut.