The NEXT plc (LON: NXT) share price edged 2.1% higher after releasing its first quarter earnings results for the 13 weeks to 29 April 2023. The company noted that its full-price sales were down 0.7% compared to last year but slightly ahead of its guidance of a 2.0% decline.
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The British multinational clothing, footwear and home products retailer reiterated its full-year sales and profit guidance, with profit before tax estimated at £795 million and Earnings Per Share (EPS) of 501.9p, which was quite impressive.
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In addition, the company noted that its total trading sales were up 1.2%, which included clearance sales that were not part of the full-price sales figures. The higher figure was driven by the increased volume of clearance sales, given that the company barely had any clearance sales in Q1 2022.
Despite the higher clearance sales figure, NEXT confirmed that the levels witnessed this year were commensurate with its pre-pandemic figures and that the clearance sales levels had returned to normal.
NEXT plc further clarified that even though its sales figures during Q1 2023 were higher than expected, the company thought it was too early to alter its sales and profit forecasts, which was why it had maintained its sales and profit guidance.
Meanwhile, NEXT’s impressive performance during Q1 2023 could signal that the British high-street retail industry is on a recovery path, which bodes well for other retailers. However, investors have to wait for the earnings results from other retailers before they can confirm this prediction.
The company has altered its forecast for Q2 2023 to maintain its overall annual forecast. The company lowered its sales forecast for the second quarter to -5% compared to last year, a drop from the -4% initial forecast.
NEXT explained that its cautious approach to the second quarter was driven by last year’s impressive performance, influenced by the warmer weather and the pent-up demand for events such as weddings, leading to higher sales figures.
The company’s first-half guidance for full-price sales is 3% lower than last year but up 18.7% versus 2019.
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NEXT share price.
The NEXT Plc share price edged 2.11% higher to trade at 6692.0p, from Wednesday’s closing price of 6554.0p.
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