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Next Q1 sales 'ahead of guidance'

Next Home and Garden Shoreham

Next, Britain's second-largest clothing retailer, posted first-quarter sales slightly ahead of its own guidance on Wednesday, benefiting from the earlier launch of a summer catalogue and warmer weather.

Shares in the firm were up 3.1 percent at 1037 GMT, the second-biggest rise on the FTSE 100 index of blue-chip companies, after it also maintained its annual sales and profit forecasts and said it would pay another special dividend of 90 million pounds.

Shares in bigger rival Marks & Spencer were up 1.9 percent.

Next has outperformed peers for a decade due to a strong online offer, new store openings and diversification into new product areas, such as homewares, as well as overseas.

The firm, which trades from over 500 stores in Britain and Ireland and almost 200 overseas as well as the Directory catalogue and internet business, said full price sales rose 3.2 percent in the 13 weeks to April 25, ahead of guidance for the first half of flat to up 3 percent.

It said the outcome was flattered about 0.6 percentage points by the earlier launch of its “New-In” brochure, which helpfully coincided with much better weather.

Next's full-price retail sales were up 0.5 percent, while Directory sales were up 7.0 percent.

"Given the fashion range problems this spring and worries about slowing Directory sales growth, the City will be pleased to see Directory sales looking strong," said independent retail analyst Nick Bubb.

Next's total sales rose 4.1 percent, reflecting a bigger winter end-of-season sale and a larger mid-season sale in Directory.

Last month Next cut its sales guidance for the year to the end of January 2016, highlighting weaker collections and tough comparative numbers in the spring and summer.

That guidance was maintained on Wednesday -- total full price sales of 1.5-5.5 percent. Pretax profit is forecast at 785-835 million pounds, growth of 0.4-6.7 percent.

Shares in the firm are up 10 percent so far this year and in the first quarter remained above its buyback price limit of 68.27 pounds.

This meant Next did not use surplus cash to retire any shares in the period and will therefore pay a further special dividend of 60 pence per share on Aug. 3.

Source : James Davey - Reuters

29 April 2015

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