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03 January 2018

Festive joy for Next as figures buck retail trend

Retailer Next has today (3rd January 2018) upgraded its profit guidance after better-than-expected full-price sales in the run-up to the crucial Christmas period.
 
Paul Murray, Stockbroker at the Market Harborough office of investment management and stockbroking firm Redmayne Bentley, said:
 
“With the retail sector continuing to struggle, we are encouraged following a more positive post-Christmas trading statement from Next bucking the trend, particularly following concern that figures might have been worse than expected. Next posted a 1.5% rise in total sales in the 54 days to December 24th after a period of cold weather, and raised its pre-tax profit guidance for the year to January 2018 by £8m to £725m.
 
“The company has also predicted a 1% gain in total sales for the year to January 2019, although pre-tax profit should come in at £705m, down from this year's level due to costs rising faster than sales.
 
“The profit upgrade shouldn't deflect from the fact that the UK clothing retailer did not have an easy Christmas on the High Street, with sales falling 6.1% in the 54 days to December 24th, however a 13.6% rise in online sales demonstrates how important this side of the business continues to be as well as the changing habits of the consumer.”
 
Next had announced in November that it expected full-price sales to drop, causing shares at the time to fall around 9%. Whilst they went on to recover some ground, they were still down from October 2015’s highs of around 8000p.
 
Shares were 4860p each at the start of Wednesday’s trading, going on to drop slightly during the morning’s trading to 4840p at the time of writing.
 
Paul added: “Also, Next announced a £300m buyback programme rather than declaring special dividends, which is important to note as this suggests that their shares are currently trading at a good value.”
 
Please note, our view does not constitute a recommendation to buy or sell shares in Next. Investments and income arising from them can fall in value and you may lose some or all of the amount you have invested. Past performance and forecasts are not reliable indicators of future results or performance.
 
For all media enquiries and comment, please contact:
Ruth Peterson
Tel: 0113 200 6476
Email: ruth.peterson@redmayne.co.uk
 
Festive joy for Next as figures buck retail trend
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