British retailer Next has released its full-year results for 2023, marking a significant milestone with “record high” pre-tax profits surging by 5 percent to 918 million pounds, surpassing earlier guidance by three million pounds.
The remarkable performance was chiefly attributed to the robust growth in online sales, which witnessed a remarkable 11 percent surge compared to a 4 percent uptick in retail sales. Operating profit soared to 996 million pounds, reflecting a commendable 5.2 percent increase.
During the period, Next’s pre-tax earnings per share (EPS) climbed from 704.8 pence to 757.2 pence, marking a substantial 7.4 percent rise. The company’s statutory profit reached 1.016 billion pounds, driven by an accounting gain resulting from its Reiss acquisition completed last year.
Furthermore, the impact of acquisitions, notably FatFace and Joules, was evident in the report. Next detailed that FatFace, of which it acquired a 97 percent equity stake in late 2023, incurred non-trading costs of 3.2 million pounds as part of its integration into the Total Platform by September 2024. Similarly, Joules incurred non-recurring costs of 9.1 million pounds due to accelerated integration into the Total Enterprise Platform.
Despite a decline in profits within Next’s franchise and wholesale division, attributed to lower franchise sales in certain regions and closures in Japan, New Zealand, and Greece, the company anticipates an upswing in total profit for the category to eight million pounds in the coming year.
Looking ahead to 2024, Next projects a 4.6 percent increase in profit, with full-price sales expected to grow by 2.5 percent and group sales, including subsidiaries, forecasted to rise by 6 percent.
The company has set profit guidance at 960 million pounds, up 4.6 percent, with post-tax EPS expected to reach 606.3 pence, reflecting a 4.8 percent increase.
In its report, Next emphasized its evolution during challenging times, highlighting its restructuring efforts and emergence with new avenues of growth. Key among these strategies are expanding the Next brand overseas, developing new brands and licenses, and boosting revenues from its Total Platform service.
Notably, Next’s online overseas business has shown promising progress, with a 17 percent increase in sales and a notable enhancement in net margins from 8.6 percent to 13 percent.
