The NEXT plc (LON: NXT) share price rose 3.81% after announcing its Q3 2023 results, where it noted a 4% increase in its full-price sales for the quarter, marking a £23 million increase from its previous guidance, which expected a 4% increase in full-price sales.
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The fashion company’s full-price sales are VAT-exclusive sales of items sold at full price in the Retail and Online channels in addition to the NEXT Finance interest income. Full-price sales exclude items sold via clearance operations, sale events and through the Total Platform.
The company also raised its full-year guidance for profit before tax by £10 million to £885 million. The firm raised its full-year guidance for the fourth time in six months as its performance improved despite the drop in weekly sales of up to 7% during the September heatwave.
The company’s sales were also weak during the first half of October. However, the company’s sales improved as the cold weather kicked in after its revenues rose 16% and 11% during the first two weeks of the month, respectively.
The fast fashion company raised its forecast and anticipates that its underlying pre-tax profit will experience a 1.7% increase over the year, reaching a total of £885 million, driven by a 3.1% growth in sales. The projection marks an improvement compared to previous guidance, which had estimated profits at £875 million and a sales growth of 2.6%.
Retailers faced a significant challenge due to unusual early autumn weather conditions, resulting in consumers showing less interest in purchasing new autumn clothing lines, such as coats, jackets, and knitwear.
Next reported that its sales experienced volatility in the third quarter due to the weather conditions, which included a cooler-than-average August.
The company stated, “We believe the volatility in sales performance is a result of changing weather conditions rather than any underlying changes in the consumer economy. In an autumn season, cooler weather tends to boost sales, while warmer-than-average weather can depress sales.”
Despite the weather-related challenges, the group has consistently raised its profit outlook, with the most recent guidance adjustment in September following a 5.4% increase in half-year sales.
NEXT share price.
NEXT Plc's share price rose 3.81% to trade at 7160.0p from Tuesday’s closing price of 6897.0p.
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