Shares of Next PLC (LON: NXT) soared 10% today after the fashion retailer said its second-quarter sales declined by better-than-expected 28%. Online sales rose 9% to partially offset falling sales.
The firm projects a full-year profit of about £195 million based on the latest financial results. A better scenario forecasts profit before tax at £330 million, while the worst-case scenario sees full-year profits at £15 million. Next has witnessed a strong rebound since stores reopened.
“Warehouse capacity has come back faster than we had planned, and store sales have been more robust than anticipated,” Next said in a statement.
Next furloughed 80% of its staff at the beginning of the outbreak, which helped the retailer save £140 million. In addition, £280 million was saved by cancelling stock, while a further £150 million worth of items that can be carried to next year.
“Next’s recovery over Q2 has proved stronger than the internal scenarios the company had previously published, resulting in a more favourable profit and cash position in the group’s revised scenarios for the rest of the year,” analysts at Peel Hunt wrote.
Next share price gapped 7% higher at the open before extending gains to around 10%. Today’s high of 5798p is the highest price traded since the first week of March.