Shares in Next soar as it raises profit forecast

 
Kasmira Jefford
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NEXT shares jumped 4.7 per cent yesterday after the clothing and homeware group posted better than expected sales and lifted its full-year profit forecast.

The FTSE 100 retailer, which has 700 stores in the UK and overseas, said that while trading had been volatile, sales increased by 4.3 per cent in the three months to 26 October. This compared with its guidance for sales growth of one to four per cent and is well ahead of a 2.3 per cent rise in the first half.

The strong performance was driven by Next Directory, its online and catalogue business, where sales jumped 10.7 per cent in the period. Meanwhile retail sales were up 0.4 per cent.

Chief executive Lord Simon Wolfson said the group now expected to report pre-tax profits of £650m-£680m this year compared with its previous guidance of £635m-£675m.

Recent figures from the British Retail Consortium showed that the warm weather knocked demand for autumn clothes in September.

However, a graph published alongside Next’s third quarter results showed the retailer bucked the gloom, with only three weeks of negatives sales.

“While volatile, only three weeks in third quarter failed to beat last year, a surprising outcome given the warm weather in early autumn and relatively tough comparatives. Few retailers will be able to match this performance, or indeed, be willing to publish weekly growth numbers,” Peel Hunt analyst John Stevenson said.