The return to formal attire “perhaps spurred by pent-up demand for social gatherings like weddings,” many of which were curtailed during COVID-19 limitations, had also appealed to the brand’s strengths, the statement continued.
The group’s sales performance exceeded forecasts by £50 million, causing it to increase its full-year profit forecast by £10 million to £860 million.
In the three months leading up to 30 July, total sales increased by 5% compared to the same period in 2018 and by 23.8% compared to the same period in 2019 before the pandemic.
Additionally, Next stated that the stronger-than-anticipated sales performance is not projected to continue at the same rate, since the weather is predicted to deteriorate in the second half of the year and inflation is likely to have a negative influence on consumers spending.
It also observed that a comparison of its full-price sales performance to the previous year suggested that online growth had slowed, while retail was “undergoing something of a revival.”
“However, we believe that these shifts reflect a short-term reversal of epidemic patterns and are not indicative of longer-term consumer behavior trends,” the report stated.
Richard Hunter, head of markets at interactive investor, stated, “A deteriorating UK economy has resulted in several instances of sluggish retail sales, and while some of the competition may have been eliminated over the past few years as smaller retailers went bankrupt, the propensity of consumers to spend on more discretionary items is likely to decrease as the financial pressure on individual spending rises.”