By Charlie Conchie
Next has slashed its sales forecasts for the second half of the year today despite a 16 per cent jump in pre-tax profit in the six months to July.
The High street stalwart said that a cocktail of cost of living pressures would put the squeeze on consumer spending power this year, as it said it now predicted sales would contract 1.5 per cent compared to last year. Profits were now expected to come in at £840, down from an initial forecast of £860m.
It came despite a strong first six months of the year for Next in which profits jumped to £401m on the same period last year as sales rose 12.4 per cent.
But the retail group said that economic pressures has already began to drag on sales in August.
“August trade was below our expectations and cost of living pressures are set to rise in the coming months. Sales in September have improved, and we may see benefits from recent Government measures,” Next said in its half year report.
“It is a very difficult call but, on balance, we have decided to reduce our forecast for full price sales in the second half from +1 per cent to -1.5 per cent versus last year.”
Earnings per share at the firm – assuming the recently announced change in UK corporation tax rate is enacted before the year end – is forecast to be 545.1p2 , up 2.7 per cent on 2021.
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