Next profit off rival Marks & Spencer's cyberattack and warm weather
The fashion and homewares retailer reported a 10.5 per cent surge in full-price sales for the second quarter to 26 July, contributing to a 10.9 per cent rise for the first half of the year.
UK sales climbed 7.8 per cent in the second quarter, boosted by what the group described as "better than expected weather and trading disruption at a major competitor."
M&S was forced to halt online trading for nearly two months from mid-April following a major cyber attack.
Consequently, Next now anticipates full-year sales growth of 7.5 per cent and profits to increase by 9.3 per cent to £1.11 billion, an uplift from its earlier projections of 6 per cent sales growth and 6.8 per cent profit increase.
The upgrade marks the group's third in just five months.
But Next said it 'remains cautious for the second half', stressing that the improved outlook is for its international arm over the next six months.
It said: 'In the UK, we believe we exceeded expectations in the second quarter as a result of better summer weather and trading disruption at a major competitor.
'We do not expect either of these factors to have a material effect in the second half, and so we are not increasing our guidance for UK sales in the second half.'
It believes sales growth in the UK will slow sharply to 1.9 per cent as the jobs market starts to falter following the Government's move to hike National Insurance contributions for employers, at the same time as rising the minimum wage.
Next said: 'We expect UK employment opportunities to continue to diminish as we enter the second half, with the effects of April's National Insurance changes continuing to filter through into the economy as the year progresses.
'We believe that this will increasingly dampen consumer spending as the year progresses.'
But an online marketing push for its international arm is bearing fruit, helping drive sales 28.1 per cent higher in the first half and with growth of 19.4 per cent now expected in the final six months.
The results come after Next announced late on Wednesday that it had bought Seraphine – the maternity fashion firm, whose clothes were worn by the Princess of Wales during her pregnancies – after it recently collapsed into administration.
Next paid £600,000 for the brand and announced it was bringing back Seraphine's founder Cecile Reinaud as an adviser to help relaunch the fashion label.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
22 minutes ago
- Reuters
Petrobras swings to profit in Q2, announces dividends of $1.6 billion
SAO PAULO, Aug 7 (Reuters) - Brazilian oil firm Petrobras posted on Thursday a 26.7 billion reais net profit for the second quarter, reversing a 2.6 billion real net loss in the same period last year. In a separate filing, Petrobras also announced 8.66 billion reais ($1.60 billion) in dividends and interest on equity to shareholders. ($1 = 5.4156 reais)
Reuters
22 minutes ago
- Reuters
CureVac settles patent dispute litigation with Pfizer and BioNTech
Aug 7 (Reuters) - CureVac ( opens new tab said on Thursday that the company and GSK (GSK.L), opens new tab have entered an agreement to a resolve patent dispute with Pfizer (PFE.N), opens new tab and BioNTech ( opens new tab related to mRNA-based COVID-19 vaccines. As part of the settlement, CureVac and GSK will receive a combined payment of $740 million and single-digit royalties on sales of COVID-19 vaccines in the U.S. going forward. CureVac will also grant BioNTech and Pfizer a non-exclusive license to manufacture, use, import and sell mRNA-based COVID-19 and influenza products in the U.S.
Sky News
an hour ago
- Sky News
Rachel Reeves said this flagship policy would raise money - it may end up doing the opposite
What do we do about the non-doms? It's a question more than a handful of people have been asking themselves at the Treasury lately. It had seemed simple enough. In her first budget as chancellor, Rachel Reeves promised a crackdown on the non-dom regime, which for the past 200 years has allowed residents to declare they are permanently domiciled in another country for tax purposes. Under the scheme, non-doms, some of the richest people in the country, were not taxed on their foreign incomes. Then that all changed. Standing at the despatch box in October last year, the chancellor said: "I have always said that if you make Britain your home, you should pay your tax here. So today, I can confirm we will abolish the non-dom tax regime and remove the outdated concept of domicile from the tax system from April 2025." The hope was that the move would raise £3.8bn for the public purse. However, there are signs that the non-doms are leaving in such great numbers that the policy could end up costing the UK investment, jobs and, of course, the tax that the non-doms already pay on their UK earnings. If the numbers don't add up, this tax-raising policy could morph into an act of self-harm. With the budget already under strain, a poor calculation would be costly financially. The alternative, a U-turn, could be expensive for other reasons, eroding faith in a chancellor who has already been on a turbulent ride. So, how worried should she be? The data on the number of non-doms in the country is published with a considerable lag. So, it will be a while before we know the full impact of this policy. However, there is much uncertainty about how this group will behave. While the Office for Budget Responsibility forecast that the policy could generate £3.8bn for the government over the next five years, assuming between 12 and 25% of them leave, it admitted it lacked confidence in those numbers. Worryingly for ministers, there are signs, especially in London, that the exodus could be greater. Property sales Analysis from the property company LonRes, shows there were 35.8% fewer transactions in May for properties in London's most exclusive postcodes compared with a year earlier and 33.5% fewer than the pre-pandemic average. Estate agents blame falling demand from non-dom buyers. This comes as no surprise to Magda Wierzycka, a South African billionaire businesswoman, who runs an investment fund in London. She herself is threatening to leave the UK unless the government waters down its plans. "Non-doms are leaving, as we speak, and the problem with numbers is that the consequences will only become known in the next 12 to 18 months," she said. "But I have absolutely no doubt, based on people I know who have already left, that the consequences would be quite significant. "It's not just about the people who are leaving that everyone is focusing on. It's also about the people who are not coming, people who would have come, set up businesses, created jobs, they're not coming. They take one look at what has happened here, and they're not coming." Lack of options for non-doms But where will they go? Britain was unusual in offering such an attractive regime. Bar a few notable exceptions, such as Italy, most countries run residency-based tax systems, meaning people pay tax to the country in which they live. This approach meant many non-doms escaped paying tax on their foreign income altogether because they didn't live in those countries where they earned their foreign income. In any case, widespread double taxation treaties mean people are generally not taxed twice, although they may have to pay the difference. In one important sense, Magda is right. It could take a while before the consequences are fully known. There are few firm data points for us to draw conclusions from right now, but the past could be illustrative. 3:06 The non-dom regime has been through repeated reform. George Osborne changed the system back in 2017 to limit it to just 15 years. Then Jeremy Hunt announced the Tories would abolish the regime altogether in one of his final budgets. Following the 2017 reforms there was an initial shock, but the numbers stabilised, falling just 5% after a few years. The data suggests there was an initial exodus of people who were probably considering leaving anyway, but those who remained - and then arrived - were intent on staying in the UK. So, should the government look through the numbers and hold its nerve? Not necessarily. Have Labour crossed a red line? Stuart Adam, a senior economist at the Institute for Fiscal Studies, said the response could be far greater this time because of some key changes under Labour. The government will no longer allow non-doms to protect money held in trusts, so 40% inheritance tax will be due on their estates. For many, that is a red line. 1:57 Mr Adam said: "The 2017 reform deliberately built in what you might call a loophole, a way to avoid paying a lot more tax through the use of existing offshore trusts. That was a route deliberately left open to enable many people to avoid the tax. "So it's not then surprising that they didn't up sticks and leave. Part of the reform that was announced last year was actually not having that kind of gap in the system to enable people to avoid the tax using trusts, and therefore you might expect to see a bigger response to the kind of reforms we've seen announced now, but it also means we don't have very much idea about how big a response to expect."
