RNS Number : 1334R

Next PLC

03 November 2021

 Date:          Embargoed until 07.00hrs, Wednesday 3 November 2021 
 Contacts:      Amanda James, Group Finance Director 
                 (analyst calls) 
                NEXT PLC                               Tel: 0333 777 8888 
                Alistair Mackinnon-Musson              Email: next@rowbellpr.com 
                Rowbell PR                             Tel: 020 7717 5239 
 Photographs:   https://www.nextplc.co.uk/media/image-gallery/campaign-images 


Trading Statement - 3 November 2021

Unless otherwise stated, all sales comparisons in this Trading Statement are given relative to two years ago (2019/20). Comparisons with last year are distorted because for much of the year, our stores were closed.


      --   Full price sales in the thirteen weeks to 30 October were 
            up +17.0% versus two years ago. 
      --   Full price sales in the last five weeks, since the update 
            given in our Half Year Results issued in September, were 
            up +14.0%. This is better than our forecast of +10%. 
      --   We are maintaining our Q4 full price sales guidance at 
            +10% and full year profit before tax at GBP800m. 


The table below sets out the performance in the quarter and for the year to date for our Online, Retail and Finance businesses. Online sales are broken down into (1) NEXT branded stock sold in the UK, (2) LABEL third-party brands sold in the UK and (3) sales Overseas. LABEL sales have been particularly strong in the third quarter.

Full price sales (VAT exclusive) versus                 Q3            Year 
 2019/20                                     to 30 October   to 30 October 
==========================================  ==============  ============== 
Online NEXT UK                                        +21%            +37% 
Online LABEL UK                                       +86%            +73% 
Online Overseas                                       +41%            +55% 
                                            ==============  ============== 
Total Online                                        +40.0%          +49.5% 
Retail (UK and Ireland)                             - 6.1%         - 28.8% 
                                            ==============  ============== 
Total Product full price sales                      +18.7%          +12.8% 
Finance interest income                             - 5.0%          - 8.9% 
                                            ==============  ============== 
Total full price sales including interest 
 income                                             +17.0%          +11.2% 
Total full price sales including interest 
 income versus 2020/21                              +12.7%          +39.1% 

For completeness, the last row of the table shows our sales performance compared to last year (2020/21).

Sales Performance by Week

The chart below gives the week by week growth in full price sales for the third quarter. As expected, sales growth has moderated in the last five weeks as the effect of pent-up demand begins to diminish.

2021 Full Price Sales Variance by Week Versus 2019 chart: Click or paste the following link into your web browser to view the PDF document. Refer to page 2 for the relevant chart.



Full Price Sales Guidance for the Fourth Quarter

We do not expect sales to continue at the level seen in Q3 and are maintaining our guidance for full price sales to be up +10% in the fourth quarter. We believe that growth in the fourth quarter will be lower than Q3 for the following reasons:

      --   The effects of pent-up demand are likely to continue 
            to diminish. 
      --   Stock availability has improved but remains challenging, 
            with delays in our international supply chain being compounded 
            by labour shortages in the UK transport and warehousing 
            networks. However, to date, stock limitations appear 
            to be offset by strong underlying demand. 
      --   Although consumer finances are in good shape, price increases 
            in essential goods (such as fuel) may moderate demand 
            for more discretionary purchases. 

Full Price Sales Summary Table

The over-performance in the last five weeks has added +0.3% to our full year guidance as set out below.

Full price sales 2021/22 versus 2019/20 (2 years)    Year to date  Q4 guidance  Full year guidance 
==================================================   ============  ===========  ================== 
Actual/new guidance                                        +11.2%       +10.2%              +11.0% 
                                                     ============  ===========  ================== 
Previous guidance                                                       +10.2%              +10.7% 

Profit Guidance, EPS and Net Debt

During the last five weeks we have beaten our full price sales forecast by GBP14m which generated around GBP4m of profit. We anticipate that this will be largely offset by: (1) further investment in digital marketing and (2) increased use of inbound air freight and other Online distribution costs. So, we are maintaining our full year profit guidance of GBP800m.

Profit before tax, EPS and net debt               Full year guidance  Versus 2019/20 
================================================  ==================  ============== 
Group profit before tax (1)                                  GBP800m           +6.9% 
Earnings Per Share                                            516.9p           +9.4% 
Year end net debt (excluding lease liabilities)              GBP610m         - 45.2% 
                                                  ==================  ============== 

(1) Profit before tax is reported on an IFRS 16 basis.


We intend to give an update on sales to Saturday 25 December on Thursday 6 January 2022.

Forward Looking Statements

Certain statements in this Trading Update are forward looking statements. These statements may contain the words "anticipate", "believe", "intend", "aim", "expects", "will", or words of similar meaning. By their nature, forward looking statements involve risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by those statements. As such, undue reliance should not be placed on forward looking statements. Except as required by applicable law or regulation, NEXT plc disclaims any obligation or undertaking to update these statements to reflect events occurring after the date these statements were published.

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(END) Dow Jones Newswires

November 03, 2021 03:00 ET (07:00 GMT)

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