Fashion retailer Next has today raised its profit forecast after sales fell less than feared over the past three months as countries emerge from a coronavirus lockdown.
Shares in the company jumped as much as 10% after it forecast full-year profit of about £195m. That was up from its guidance range in April of between a £150m profit and a £150m loss.
Sales fell 28% in the quarter to July 25, against the 50% drop forecast in April.
"The stores opened better than we thought; they were still obviously down a long way, but we were expecting them to be down as much as they were in the week going into lockdown," Next's chief executive Simon Wolfson told Reuters in an interview.
"And we managed to build back our warehouse capacity much faster than we had anticipated we would be able to do," he added.
Online sales bounced back as warehouses returned to normal, with sales up 9%, helped by much lower returns on the categories that were selling well - childrenswear, home and casual clothes - than on items less in demand, such as dresses and formal wear.
But like-for-like sales in Next stores, the bulk of which re-opened in June, were down 72% in the quarter, and down 32% since June 15.
Wolfson said stores in retail parks where it was easy to socially distance were performing much better than those on high streets and in shopping centres, reflecting lower footfall in city centres and less use of public transport.
Next still has about 12% of staff on temporay layoffs, Wolfson said, but he expects all of them to return by November.
He said the company was not planning job cuts beyond a small number already announced at head office.
