Next says that home products performed well in recent weeks, and, together with online trading, helped offset the damage incurred by store closures and weaker product categories.

The retailer has reported a -1.1% YoY drop in full-price sales for the nine weeks to 26th December (significantly ahead of expectations). With losses from obstructed sales and those anticipated as a result of this month's store closures, Next expects is FY profit before tax to be £370m (£342m after accounting for non-recurring items).

During the period in question, the sales gained online compensated for almost all those lost in retail stores, says Next, with total product full price sales down just -0.5%. As of 26th December, Next's online customer base was up 24% YoY. From a bricks-and-mortar perspective, stores in out-of-town retail parks continued to perform around +15% better than those in city centres and shopping centres.

For the year ahead (2021/22), Next's central (avoiding extremes) guidance, which assumes its retail stores will be closed in February and March, is for profit before tax of £670m. It assumes that 50% of its lost in-store retail sales this winter will be recouped online.

In addition to the closure of shops, the pandemic has adversely affected the flow of container traffic from the Far East, and at present many of Next's deliveries are running two to three weeks late, and this level of disruption is expected to continue into the new year. Stock levels are currently down -10% versus two years ago. Next expects stock levels to steadily improve and return to more normal levels by the end of March.