Moving forward, the clothing-to-home furnishings retailer expects “slightly lower” sales prices this year due to lower commodity costs.
The company said it expected some relief for struggling shoppers despite a £60m hit from rising wages.
The company made the forecast while revealing that pre-tax profits would rise 5% to £918 million in the 12 months to the end of January.
Proposed to pay an ordinary dividend of £258m and buy back £288m of shares.
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Next maintained its 2024/25 profit forecast for growth of just under 5%.
The company said that as the trading environment remains uncertain living cost Household budgets are being squeezed by high interest rates to cope with the pace of price growth in the economy.
But it still expects full-price sales to grow 2.5% this year.
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“On the surface, the consumer environment looks more benign than it has been in years, despite some significant uncertainties,” Nester said.
The group said it currently does not expect any material adverse impact from inventory delays caused by disruptions to Suez Canal shipping.
The company said that while shipments were delayed by up to 10 days, they were managed efficiently.
Next said the inventory delays did not hurt its profits.Image source: Reuters
The Office for National Statistics (ONS) said the UK has not yet seen any price increases due to the Red Sea issue.
There are concerns that the extra sailing time for cargo ships will increase fuel bills and wages for carriers, adding to costs on UK shelves.
Next’s guidance on its own prices will come as a relief to shoppers as it puts pressure on rivals to keep pace.
Like most sectors of the economy, retail has passed on higher costs since the end of the coronavirus crisis, exacerbated by Russia’s invasion of Ukraine forcing energy bills to reach unprecedented levels.
Other complaints include business rates.
Next shares opened up 2%.
Wealth Club portfolio manager Charlie Huggins said of the performance: “This is another strong result for Next, with sales and profits rising in a year of high economic uncertainty and rising inflation. Both achieve growth.
“With inflationary pressures easing and fears of a hard landing receding, Next can look to the year ahead with confidence.”
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