Next Plc brought in £75 million more revenues than it had expected to this spring – smashing its forecast for the period.
The high street giant said overall sales for the last three months were down just 1.5 per cent on where they were two years ago – way better than the 10 per cent drop it had expected.
For most of the period Next stores – along with other non-essential shops – were closed.
The growth was due to a big rise in online sales – up 69 per cent on where it was two years ago.
But rather than shopping for men's and womenswear, Next said the strong sales were due to people splashing out on homeware, branded goods and kidswear. Overseas sales were also up substantially.
Thanks to the online success the business expects profits for the full year to be £20 million up on first forecast at £720 million.
It expects sales from its bricks and mortar stores to remain down a fifth for the rest of the year, with overall sales for the coming nine months around 3 per cent up on two years ago – although a best case forecast could see a 7 per cent jump.
Shares in the Leicestershire-headquartered business were up almost 3 per cent this morning at £83.64.
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In a trading update for the first quarter of its financial year the traditionally cautious business said: “Evidence from last year suggests that this post lockdown surge will be short lived, and we expect sales to settle back down to our guidance levels within the next few weeks.
“We are therefore maintaining our sales guidance for full price sales for the rest of the year to be up 3 per cent versus 2019.
“Within this guidance, we have maintained the assumption that retail will be down 20 per cent and online will be up 24 per cent.”
Russ Mould, investment director at online stockbroker AJ Bell said just three weeks after non-essential shops were allowed to open, a picture was starting to emerge on where the high street was headed.
He said: “In Next’s case the company has done very well, citing pent-up demand built up over lockdown.
“However, it doesn’t believe the strong sales growth of the past three weeks is the shape of things to come. That’s a sensible view.
“A lot of people will have built up cash savings during the various lockdowns, so there is the capacity to spend big in the shops.
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“The question is whether people might spend their money elsewhere, given how we’ve already been spending heavily via online channels to have clothes, trainers and other treats delivered home to relieve the boredom of lockdown.
“Consumers might now prefer to keep their cash for leisure activities and holidays when allowed.
“Next could feasibly get another sales tailwind if more people are called back to work in the office, as there seems a good chance that many people will have put on a few pounds during lockdown and need bigger trousers or shirts.
“For now, the company will just have to focus on running its business efficiently and offer as wide a range of products as possible to keep attracting customers.”