Next, the leading British clothing retailer, forecast lower profit in its 2023-24 year, reflecting uncertainty over whether consumers would keep spending during the recession and as the group’s costs rise.
The group raised its pretax profit forecast to 860 million pounds (US $ 1.03 billion) for the current year from a forecast of 840 million pounds previously after full-price sales rose a better than expected 4.8 per cent in the nine weeks to 30th December.
But it said it was cautious in its outlook for the 2023-24 year, forecasting full price sales down by 1.5 per cent and pretax profit of 795 million pounds, down by 7.6 per cent on 2022-23.
The retailers trades from about 500 stores as well as online and it is the first major UK apparel retailer to report on Christmas trading.
The company is often considered a gauge of how British consumers are faring.
It is worth mentioning here that the UK consumer outlook for 2023 is poor, given inflation is running at 10.7 per cent and consumer confidence is close to record lows. Taxes and mortgage rates are increasing, government support on household energy bills is set to be scaled back and the risk of higher unemployment in a recession is growing.
However, Next has stated, “On a more positive note, we expect employment to remain strong so are not anticipating a collapse in demand or any increase in bad debt over and above our current provisions.”
