Investors will turn their focus to Next’s half year results on Thursday to see if the retail powerhouse has continued to keep up the strong momentum it showcased to markets during the summer.
Last month, the high-street favourite raised its profit guidance for the year by £10m to £845m after it was bolstered by shoppers updating their summer wardrobe.
It marked the second time the retail giant bumped up its outlook for the year, having also previously done so in June.
For the year, Next also said it expects full price sales to rise 1.8 per cent to £4.68bn compared to a previously forecasted £4.67bn.
Over the past few years, the British retailer has become known for saving troubled brands and later selling their products on its online website.
It acquired online furniture store Made.com last November for a mere £3.4m after it struggled post-pandemic – a staggering discount from the firm’s £775m IPO price in 2021.
It has also snapped up retailer Joules and the UK arm of lingerie giant Victoria Secret.
Russ Mould, investment director at AJ Bell, said. “Shares in the multi-channel retailers are up by a fifth over the past year, helped by a deceleration in inflation, decent wage growth, hopes for a peak in interest rates and a UK economy that (just) continues to dodge a long-forecast recession.”
“In contrast to 2022 when profit warnings predominated, Next has spent 2023 upgrading its earnings guidance, and chief executive Lord Wolfson nudged up expectations at August’s trading update.”
“Finally, Lord Wolfson [chief of Next] has suggested that earnings per share, or EPS, would drop seven per cent to 535p for the year to January 2024,” he added.
“The drop is due to the increase in UK corporation tax rate, partially offset by a £220 million share buyback as a return of what the company terms surplus cash. Those buybacks reduce the share count.”