Wednesday 28 October 2020 8:54 am

Next hikes profit forecast after stronger than expected sales

Next has hiked its profit forecast for the year after sales in the third quarter were stronger than expected.

The high street retailer said full-year profit before tax is now expected to be £365m, £65m higher than the forecast given in September.

Read more: Next raises profit outlook as sales rise

Full price sales in the three months ended 24 October increased 2.8 per cent compared to last year, despite the impact of the coronavirus pandemic, Next said.

However in the year to date sales are down 20.5 per cent on 2019 levels and the threat of further local lockdowns has created uncertainty.

Next said the “biggest single unknown” is whether the rest of the UK will follow Wales’ lead and shut non-essential stores.

A two week lockdown in England, Scotland and Northern Ireland next month would reduce full-price retail sales by £57m.

The retailer added that new tariffs will increase Next’s annual import duty costs by around £13m. It had previously said that the Temporary Tariff Regime would reduce costs by £25m.

In the third quarter, the retailer’s home products sales were strong – reflecting an industry-wide trend – along with children’s-wear.

Read more: Next boss warns thousands of retail jobs set to become ‘unviable’

Demand for men’s and women’s occasion outfits remained weak due to the cancellation of most formal events.

Next said online sales were strong, while out of town retail parks performed better than high streets and shopping centres, which have seen a sharper drop in footfall.