M&S cyberattack helps Next to beat expectations again
High Street darling Next has said that good weather and the disruption to Marks & Spencer caused by its recent cyberattack has helped it to beat expectations yet again.
The Lord Wolfson-run fashion group said full price sales were up over 10 per cent in the first half of this year, nearly £50m ahead of its guidance for the period of 6.5 per cent.
Top brass highlighted the better run of good weather as helping lift sales, as more shoppers opted to go shopping in the sun and chose to update their wardrobes to adapt to the hotter conditions.
They also said “trading disruption at a major competitor” – interpreted to mean M&S – was also behind its better-than-expected performance. The group told investors that consumers had turned to Next over the first six months of the year, after M&S was rocked by an aggressive cyberattack that left it unable to take online orders for several weeks.
“In the UK, we believe we exceeded expectations in Q2 as a result of better summer weather and trading disruption at a major competitor,” the firm said in its interim update. “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 H2.”
Strong digital and overseas performances
Next leadership also revealed the firm’s international division performed above expectations thanks to digital marketing campaigns proving to be “more effective than anticipated”.
This allowed the group to double down on its profitable spend spend, boosting revenue in operations across Europe and the Middle East, it said.
The stellar performance overseas – which saw overall sales jump by over 28 per cent across the first half – helped it to raise its full-year guidance for the second half from 3.5 per cent to 4.5 per cent.
The earnings are the latest in a long string of positive updates from the group, which has largely managed to buck the malaise that has set in across a lot of UK retailers.
“Yet again, Next is showing it can buck wider trends and maintain its position as the UK’s top retail success story,” said Zoe Gillespie, wealth manager at RBC Brewin Dolphin.
She added: “Next is cautious about the second half of the year, but the company has a good track record of under-promising and over-delivering.”