Next, the UK-based fashion retailer, has reported impressive full-year results, showcasing its resilience and success amidst the challenges of the pandemic. The company saw a significant increase in brand full-price sales, with a 12.8% growth compared to the pre-pandemic year and a remarkable 32.4% rise compared to the previous financial year. Moreover, Next achieved a pre-tax profit of £823 million, representing a 10% increase from 2019 and a staggering 140% growth from 2020.

One of the standout contributors to Next’s success was its online sales, which experienced remarkable growth. Online sales rose by 31.1% compared to the previous year and a remarkable 44.6% compared to two years ago, reaching an impressive £3.103 billion. In contrast, store retail sales saw a 50.1% increase in the past year but suffered a decline of 22.7% over the span of two years, amounting to £1.432 billion. In total, Next’s group sales increased by 34.1% over one year and 11.5% over two years, reaching £4.861 billion.

While online profits saw an impressive surge of 23.5% over one year and 43.4% over two years, physical store retail profits experienced a decline over the same periods. However, Next remains highly profitable, with operating profit reaching £905.4 million in the past year, more than doubling its profit from the previous year and experiencing a 6% increase over two years. Net profit also increased significantly, with a growth of over 136% compared to a year earlier and an 11% rise over two years, amounting to £677.5 million.

Despite these positive results, Next has adjusted its sales guidance for the current year due to the closure of its websites in Ukraine and Russia and moderating growth expectations in other international markets. The company has lowered its sales guidance by 2%, representing £85 million, and scaled back profit guidance by 1.2%, amounting to £10 million. However, Next still expects sales and profits to increase in the upcoming year. The revised guidance includes an improved outlook for UK retail sales, which will compensate for the anticipated loss of lower-margin sales overseas and the associated cost of increased markdowns. The company’s central case scenario predicts a 5% increase in full-price sales and a 3.3% increase in group profits, amounting to £850 million.

Looking back at 2021, Next describes it as a successful year, surpassing expectations and compensating for lost sales during the first quarter through its online operations while its physical stores were temporarily closed. Despite stock shortages in the second half of the year, Next’s online operations continued to thrive, driven by pent-up consumer demand following the easing of lockdown restrictions. The company also celebrated the successful launch of four new clients on its Total Platform third-party online operation, generating a profit of £10 million in the first year, with expectations of reaching around £20 million in the current year. The recent launch of Reiss represents Next’s largest and most comprehensive Total Platform project to date.

Looking towards the future, Next acknowledges the challenges posed by the current year’s geopolitical and economic uncertainties. The company recognizes the difficulty in providing accurate guidance given the circumstances. Factors such as consumer reactions to higher prices and the necessity for Next to raise its product prices are expected to impact its performance. Additionally, the recent Russia-Ukraine conflict adds another layer of unpredictability. Furthermore, Next is aware of the significant changes in the retail industry accelerated by the pandemic, as consumers increasingly shift towards online shopping and seek more diverse options. Online aggregators like ASOS, Zalando, Tmall, Myntra, and Next have gained importance, while traditional retailers have struggled to adapt.

In light of these changes, Next aims to expand its brand offerings and international reach while establishing itself as a leading online aggregator in the market for fashion, homeware, and beauty customers in the UK and Ireland. The company recognizes the role of online aggregators in providing access to millions of customers worldwide and is committed to positioning itself as the go-to aggregator.

With its strong performance in the past year and strategic goals for the future, Next is well-positioned for continued success in the ever-evolving retail industry.

Useful links:
1. [ASOS](https://www.asos.com/)
2. [Zalando](https://www.zalando.com/)