// Next profit drops in the year to the end of January
// It raised its profit guidance for the 2021/22 financial year despite a slump in earnings
// Total sales across the group dropped 17% to £3.6bn
Next has seen its pre-tax profit drop by a staggering 53 per cent to £342 million in the year to the end of January as it suffered “a crisis unprecedented in living memory”.
The fashion retailer raised its profit guidance for the 2021/22 financial year despite the slump in earnings.
Next’s operating profit dropped 50 per cent to £384.2 million during the period.
Online sales have risen by 10 per cent across the 52-week period to £2.37 billion, while revenues raked in from stores fell 48 per cent to £954.5 million as stores remained shut for the majority of last year.
Total sales across the group dropped 17 per cent to £3.6 billion.
Full-price sales declined by 15 per cent during the year.
Despite the challenging 12 months, Next raised its central profit by £30 million to £700 million for its 2021/22 fiscal year.
It said while full-price sales would likely be flat compared to 2019/20, online sales had been “stronger than expected” in the first eight weeks of the new financial year, growing 60 per cent compared to two years ago.
Next chief executive Lord Wolfson warned that the wider retail outlook remains “uncertain”.
“The health of the consumer economy, the future course of the pandemic and the prospects for retail stores remain unknown,” he said.
“It also remains to be seen how many of the product preferences and shopping trends induced by the pandemic will persist once life returns to normal.”
“Next’s best guess is that the consumer economy will be healthier than many presume during the short term.
“A big question mark remained over the level of sales that stores will achieve once they reopen on April 12.
“The pandemic has served to accelerate a pre-existing social trend – the move to more online shopping. History has been given a shove and, having moved forward, seems unlikely to reverse.”
Next expects a 20 per cent drop in store sales in its new financial year, given the rapid shift to online shopping that has taken place during three national lockdowns.