"Next to ease up on price increases after delivering “solid” FY", 29 March 2023

Next revealed better-than-expected annual profits for the year ending 2023, up nearly 6%, while full price sales grew almost 7% on last year. The retailer said it was maintaining its full-year 2023 guidance, however, which is forecasting a drop in both sales and earnings.

The retailer, which has been increasing prices to offset rising costs, said price inflation is expected to be “more benign” than previously though. It is forecasting increases of 7% in spring/summer and 3% in autumn/winter. This compares to previous rises of 8% and 6% respectively...

Chairman, Michael Roney, said: “...If we continue to improve our product ranges, relentlessly manage our costs and upgrade our customer service, whilst also developing new business opportunities; we can lay the foundations for an exceptionally strong business and still deliver healthy profits, cash flow and dividends.”

Next growth drivers

The retailer set out its priorities for the year ahead, including the full implementation of two new websites for JoJo Maman Bébé and Made.com, the development of the Joules’ website, improvement of its product ranges and its online service levels, and managing costs and profitability.

“This year, the opportunity for growth is naturally limited by market conditions, so we will focus on improving the basics of our business whilst taking the opportunity to strengthen the foundations of the business for future years,” Next said in its trading update.

For the year ahead, Next is budgeting for full-price sales to be down 1.5% versus last year and profit before tax to be GBP795m.

“The year ahead looks like it will be challenging: the combination of inflation in our cost base and top line sales which are likely to edge backwards is uncomfortable,” Next said...