Even though the cold weather is aiding sales, the high street leader has a “conservative” prognosis for the coming year. And anticipates a decline in profit and revenue.
Next outperformed expectations throughout the holiday season and as a result has boosted its earnings estimate. Portraying an optimistic image for retail during the holiday season.
In the nine weeks leading up to 30 December, sales increased by roughly 5% compared to the same period in 2021. Thus exceeding the retailer’s projection of a 2% decline and coming in £66 million better than anticipated.
As a significant high-street retailer, Next is regarded as an industry barometer.
The company raised its projection for a full-year profit before taxes by £20 million to £860 million, up 4.5% from 2021. But remained “conservative” in its “view for the coming year.”
The cold weather is partially responsible for the “dramatic increase in sales,” according to Next’s trading update.
“We feel that the high demand for cold weather products in December was partially the result of pent-up demand after October. And November’s extraordinary warmth.”
The outlook for the coming year, though, is deteriorating. Compared to the current year, it is anticipated that full-priced sales will decrease by 1.5%. And that profit before tax will decrease by 7.6% to £795m.
The price of Next’s stock reached a level not seen since mid-August as a result of the news.
Despite anticipated economic difficulties, such as severe weather and rail strikes, other major outlets reported comparable gains.
In the final three months of 2022, Greggs reported an 18.2% increase in revenues compared to the same period in 2021. For the entire year, revenues were up 17.8% from 2021.
Greggs stated in a trading report that the interruption caused by the COVID-19 epidemic was greater than the impact of the strike action and adverse weather.
“This reflected a favorable selling pattern leading up to the Christmas period. And softer trading conditions in the corresponding quarter of 2021. As a result of interruption caused by the Omicron type of coronavirus,” the report stated about the increase in sales.
The baker reported that 186 new stores opened and 39 shuttered within the past year.
It was more positive than Next about the upcoming year. Telling investors, “We begin 2023 in a good financial position. That will allow us to expand in shops and supply chain capacity to offer Greggs to even more people across the UK.
Greggs may benefit from a decrease in spending. The report stated, “While market conditions in 2023 will remain challenging. Our value-for-money offer of freshly prepared food and drink is highly relevant. As consumers seek to manage their budgets without sacrificing quality or taste.”
In the 13 weeks leading up to December 24th. Revenue at discount retailer B&M increased by 12.3% to reach $1.56 billion. As a result, analysts anticipate pre-tax profits of between £560 million and £580 million.
A cost of living issue caused by double-digit inflation, pushed up by high energy costs. And supply chain difficulties, has eroded disposable income. And was anticipated to dampen economic activity in the run-up to Christmas.
