For its second quarter ending in July, Next reported a 3.2% increase in full-price sales, surpassing expectations by £42 million. In the first half, full-price sales were up by 4.4%, while total group sales, including markdowns, subsidiaries, and investments, increased by 8% during the period.
For the full year, Next maintains its guidance on full-price sales but expects full-year profit before tax to increase by £20 million to £980 million, a 6.7% rise compared to last year. It also anticipates additional sales of £11 million and cost savings of £9 million, primarily in logistics.
Mintel comment:
“It was a tale of two channels for Next in the first half of 2024. Retail full-price sales, battered by the cool and often wet weather, were down by 2.6%. In contrast, online full-price sales in the UK were 3.3% higher in the same period, as customers stayed at home and shopped. Looking at Next's online sales in more detail Label, which sells third-party brands through the Next website, was the star performer, with a 4.8% increase in full-price sales, compared to Next's own brands, up 2.2%. This only goes to underline the appetite among customers for third-party brands, something Next was much quicker to recognise than many of its rivals, who are scrambling to catch up.
Next is reasonably well-insulated from the growth in fast fashion from the likes of Shein and Temu and the growing popularity of second-hand. It scores strongly among female 35-44 fashion shoppers and those from higher earning households, who have the budget to invest in quality fashion items and are less likely to buy fast or second-hand fashion items than their younger 16-34 counterparts. For more information on this and other trends in the market, see our forthcoming report Fashion Online - UK - 2024.”
