First it was H&M, then Zara and now it’s Next!
The British fashion stalwart has joined the other fashion giants in reporting better-than expected recoveries for the year.
The retailer is expecting a pre-tax profit of US $ 388 million for 2020. Notably, the midpoint of Next’s earlier forecast was US $ 252 million.
This is the second time the retailer has raised its outlook since the pandemic. In April 2020, its worst-case scenario was loss of US $ 194 million and its midpoint was for no earnings.
It further upgraded the outlook in July following reopening of stores.
The retailer said that despite the pandemic crisis, sales continue to be better than expected and a major part of this owes to cooler weather in August that has made people come out and shop for autumn dresses.
Additionally, with restrictions imposed on foreign travel, domestic apparel sales have got a huge boost in the UK.
However, as per a report in Bloomberg, Next has warned that the strong sales witnessed ever since the stores reopened may not continue for long. The Government’s wage support programme, which may end in October, could hit the sales again.
Besides, with coronavirus cases still rising, there could again be store closures and lockdowns. Owing to this uncertainty, the retailer has reportedly refused to pay any interim dividend.
Next’s warning also means that the retailer is prepared to combat all the challenges that are on the way.
It will be interesting to see how next few months turn out to be for Next and other UK retailers – especially with so much uncertainty hovering around.