Next delivers solid performance but warns of future

Earlier today Next, the fashion to home retailer announced a solid performance for the year ending January 2016, with sales increasing 3% to £4.1Bn and pre-tax profit up 5% to £821m.

Their online and catalogue business Next Directory, climbed by 7.7% with full price sales rising by 6.5%. The number of active customers increased by 11% to 4.6 million, driven by the acquisition of UK 'cash' customers and customers overseas. Meanwhile, their high street stores saw sales increase 1.1% with net new space contributing 2.4% to growth. Full price sales rose by 2.2%.

During the year, the company invested £151m on new shops, a new warehouse and IT systems.

Looking at the year ahead, Next chief executive Lord Wolfson said Next may well be facing the toughest year since 2008. He added: “In addition to our generally more cautious outlook for the economy, we also believe that there may be a cyclical move away from spending on clothing back into areas that suffered the most during the credit crunch.”

The company is forecasting profits for the year to the end of January 2017 to be between between £784-£858 million and the the company estimates that full-price Next brand sales will range from a drop of 1% to growth of 4%.

Next chairman John Barton said: “2016 will be a challenging year with much uncertainty in the global economy. For Next it makes it particularly important that we remain focussed on our core strategy of delivering long term sustainable growth in EPS, investing in the business, improving the design and quality of our products and returning surplus cash to shareholders.”

Source: The Retail Bulletin.