Share Prices & Company Research


03 January 2020

Next Enjoys a Positive Christmas Trading Period and Raises Hopes for the High Street

Next has delivered a positive fourth quarter performance, once again, circumventing the wider troubles facing the British high street.

Saul Fulda, Investment Analyst, said:

“The sales of Next Plc rose by 5.2%, beating internal forecasts by 1.1%, with the online division delivering a phenomenal 15.3% sales growth, offsetting the 3.9% decline in retail sales and weaker results in the end-of-season sale.

Next Plc has upgraded its full-year profit guidance for the current year by £2m (+0.6%) to £727m and Earnings Per Share (EPS) are estimated to improve by 5.4%. Forecasts for 2021 have also been released, with initial estimates for sales growth of +3%, profits +1% and EPS increasing by 3.5%. Shares remain unmoved in mid-morning trading, illustrating the market’s expectations for the esteemed retailer, with this positive update seemingly already priced-in to the retailer’s share price value.

Next has overcome the challenging retail market environment relatively unscathed and successfully shifted its business towards the more profitable online segment.”

Phillip Wong, Investment Manager, added:

“Other retailers may not be as fortunate as Next. In the lead up to the busy Christmas period, management boards managed expectations with modest forecasts. Disruption in the retail sector has been rife and one can expect this to continue throughout 2020 and beyond. Strong supply chains, efficient distribution channels and plentiful cash flow will prove key to retailers’ survival.

Fortunately, Next has these qualities and as further inevitable high street casualties arise, they could stand to benefit as customers look to spend their money elsewhere. The UK market, however, has been very much sentiment-driven by Brexit, and how Next shares trade over the near term is likely to be driven by the progress of ongoing EU negotiations.”         
Next Enjoys a Positive Christmas Trading Period and Raises Hopes for the High Street
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