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31 October 2018

Next still following the retail trends

Fashion retailer Next has balanced out falling High Street sales with growth in its online business, according to its third-quarter results.

The UK’s second-largest clothing retailer announced in its latest results that in-store sales had fallen by 8%. This was in line with a general downward trend for High Street sales with the warmer-than-usual Autumn seeing a reduced demand for coats and winter accessories. However, Next’s online sales had risen by 13% over the quarter.

After an initial drop at the start of trading today (31st October 2018), the share price went on to recover some ground during the morning.

Paul Murray, Head of Office and Stockbroker at the Market Harborough office of investment management and stockbroking firm Redmayne Bentley, said: “The Next share price retreated after the retail bellwether posted slower online growth and a continued decline in store sales. The clothing and homeware retailer, however, backed its full-year guidance as online sales growth still offset the continued decline in sales within their shops.

“Although the trading update was solid, it still reflects the shift in consumer behaviour with online sales outperforming High Street sales. This trend is reflected across many retailers with a general slowdown in retail sales across the board, but also the unseasonal warm weather in the Autumn provided challenges for all clothing retailers. The company remains well-managed and appears fairly valued, supported by a 3% dividend yield and strong free cashflow generation.”

Dividend yield history:
  • 25th January 2014: 2.85%
  • 24th January 2015: 4.2%
  • 30th January 2016: 5.75%
  • 28th January 2017: 4.1%
  • 27th January 2018: 6.48%
Ends
 
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Notes to Editors
Redmayne Bentley has a full range of services, from investment management services suitable for different life stages, through to traditional stockbroking, dealing with advice and tax efficient investments.
Please note, investments and income arising from them can fall as well as rise in value and you may lose some or all of the amount you have invested. Past performance and forecasts are not a reliable indicator of future results or performance. Our view does not constitute a recommendation to buy or sell the shares of Next.
 
Next still following the retail trends
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