Next Q3 full-price sales rise as online growth makes up for weaker stores
today Oct 30, 2019
Next delivered a fairly brief trading update covering its third quarter on Wednesday and it contained what’s becoming an increasing rarity in the UK fashion retail sector — some good news.
The company said that Q3 full-price sales were up 2% on last year, slightly ahead of the guidance given in September. And in the year-to-date, full-price sales are running higher by 3.5%, with the company maintaining its guidance for a 3.6% rise in the year as a whole. Its profit guidance also stays the same with the company expecting £725 million, up 0.3% year-on-year.
In the three months to October 26, the retailer continued to see falling full-price sales in its physical stores with the Retail division’s sales being down 6.3%, a bigger drop than the 4.8% fall in the first nine months. But Online continued to take up the slack and rose 9.7% in Q3, while the nine months of the financial year so far saw e-sales rising 11.1%.
Of course, ‘full-price sales’ also include finance interest income and with that factored out, product full-price sales were up a smaller 1.6% in total for the quarter and 3.1% for the year so far. But the fact that product sales are continuing to rise is a win for the company in what is a record-breaking weak environment in the UK.
The firm said that the quarter got better as each month went by with just a 0.2% rise in August and a 1% uplift in September. But October rose a healthy 5%.
“We believe that strong sales in July pulled forward sales from August,” it said. “Sales in September were adversely affected by unusually warm weather and we saw a significant improvement in October when temperatures fell. We believe the improved sales growth in October recouped some of the lost sales in September and we do not expect sales growth for the rest of the year to be as strong as October.”
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