Brand full-price sales were up +8.8% Yo2Y for the six months to July 2021, reports Next, which achieved a profit before tax of £347m (+5.9% Yo2Y).
The retailer states that its "gloomiest projections, made at the nadir of the crisis, were a long way off the mark", and that the combination of high online sales and April's retail bounce-back proved far stronger than anticipated.
Brand total sales were up +8.4% Yo2Y. Full-price Home sales grew +170%, from £17m in July 2019 to £45m in July 2021.
Full-price sales in the last eight weeks were up +20% Yo2Y.
Next is increasing its full-price sales guidance for the rest of the year to be up +10% Yo2Y, with forecast profit before tax now £800m, up +6.9% Yo2Y.
Next expects to close 13 mainline stores this year, only three of which came as a result of being unable to agree acceptable new terms with landlords. The retailer plans to open eight new clearance stores, with an average lease term of three years.
Average selling price inflation in the current season is running at around +2%, with price rises focused mainly on larger Home products. Next anticipates selling price inflation of around +2.5% in the first half of 2022, and that inflationary pressures in shipping will begin to ease through H2. Next expects cost price inflation in H122 to average at +2.5%, with homeware prices rising by +6%.
"Stepping back from the noise of day-to-day trading, the longer-term outlook for Next appears to be more positive than it has been for many years," says chief executive, Lord Wolfson of Aspley Guise. "There are two reasons for this optimism. Firstly, the financial drag of our retail business has diminished. Secondly, within the last two years the scale and breadth of our online opportunities have materially increased."