The retailer has also cautioned about slow growth over the coming months due to the increasing cost of living.
British multinational retailer of footwear, clothing, and home products, Next, is reportedly set to record annual gains that are $12 million (£10 million) more than previously estimation following a dramatic rise in sales of summer outfits and suits, which comes despite the rising pressure of increasing energy, petrol, and food expenses on shopper’s wallets.
As per assessments made by the clothing and homeware retailer, full-value sales surged more than that estimated 5% during the three months till 30 July. The retailer has however cautioned that it is anticipating a drop in profits, by as much as 1%, in the second half of the year on account of the nation’s rising cost-of-living crisis.
This unprecedented growth in first half sales has raised Next's full-year profit estimates to $1 billion (£860 million), projecting a growth of 4.5% since the last year.
The pandemic-led shutdown of several rival stores such as Debenhams, Topshop, and Dorothy Perkins, accompanied by their transition towards online-only selling, further benefitted the company.
Next Chief Executive, Simon Wolfson, stated that the arrival of the summer holiday season boosted the firm’s summer weight products sale. The demand for warm weather gear and suits has been amplified due to the return to office work, weddings, and other events coming back in trend after over two years of at-home restrictions.
Wolfson considered this a short-term trend as people might have restocked their wardrobes after wearing casuals for more than two years during the pandemic.
He talked also about the prospect that people who stopped trading would pick up their business from people that are no longer around.
Wolfson further envisions the inflation in clothing prices to persist till next year, but at a rather slow pace as the cost of shipping and commodity have reduced due to decreased demand.
The company cautioned that spending might get worse over the coming months as clothing costs are estimated to increase by 8% and 6.5% on fashion and homeware, respectively.
Moreover, Next’s online sales enlarged to over 0.2%, in contrast to the same quarter last year, which was a recovery from an 11.1% fall in the first quarter of 2021 when numerous Next stores were closed. Next has been made FTSE 100’s one of the biggest risers with an upsurge of 2%.