SHARE OF THE WEEK: Next set to provide insight into the state of High Street and the mood of shoppers
Next will provide insight into the state of the High Street and the mood of shoppers next week.
All eyes will be on fashion retailer FTSE 100 – and the views of its boss Simon Wolfson – when it reports its annual results on Wednesday.
Investors will be interested to see if shoppers are still spending on clothes in the face of higher prices — and how much Wolfson thinks prices will need to rise.
Earlier this year, the company raised its full-year profit forecast after posting better-than-expected sales during the Christmas shopping season.
Analysts expect Next to report a 4.5% rise in sales to £5.1bn for 2022.
Profits are expected to rise by a similar amount to £860million.
Given the turmoil in the financial markets, investors could certainly have something to cheer about, and Next shares have risen around 15% this year, although they remain down around 20% since the end of 2021.
Aarin Chiekrie, equity analyst at investment platform Hargreaves Lansdown, said: “The latest trading update from Next has given the group cause to celebrate.
“Sales during the Christmas period were better than expected. While these numbers are commendable, given the difficult environment for retailers, it’s important not to lose sight of the challenges ahead. To cope with rising costs, Next is raising its prices.
“There is a question mark over whether consumers can afford these increases. Otherwise, we could see sales plummet.
“The group’s position as an intermediary retailer means that its customers could slide along the value chain rather than shell out a bit more.”