Next lifts guidance after better-than-expected Xmas sales

(Sharecast News) - UK fashion retailer Next lifted annual guidance after better-than-expected full-price sales during November and December. Full-price sales in the nine weeks to December 30 rose 5.7% year-on-year, £38m better than previous guidance of a 2% rise.

Annual pre-tax profit increased by £20m to £905m. Of the £20m increase, £17m came from the sales beat to date and £3m from an upgraded forecast for full-price sales in January.

"Cost price inflation in our own products is diminishing, mainly as a result of decreasing factory gate prices. We believe that this will allow us to maintain zero inflation in selling prices, along with a small increase in bought in gross margins. This will be the first time in three years that input prices have been stable," the company said on Thursday.

However, it also warned of possible delays to stock deliveries in the early part of the year if attacks on shipping in the Red Sea by Iran-backed Yemeni Houthi militants force container vessels to avoid the the Suez Canal.

Reporting by Frank Prenesti for Sharecast.com