Next increases profit forecast after sales rise

Kasmira Jefford
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NEXT yesterday said it enjoyed a pick-up in sales in the third quarter of the year after seeing a slowdown around the time of the Olympics.

The fashion and homeware retailer, led by chief executive Lord Wolfson, said stronger sales in late September and early October made up for the “unusually quiet” start to August.

The group reported a 2.7 per cent rise in sales excluding VAT in the three months to 27 October. Store sales were up by 1.1 per cent in the period, compared with 0.5 per cent for the year to date.

However, Next Directory, its online and mail order business, reported weaker-than-expected trading, with sales up 5.6 per cent in the period.

Investec analyst Bethany Hocking had forecast growth of 11 per cent.

“Consensus was hard to gauge going into this statement, but, given that directory had seen double-digit sales growth for six consecutive quarters, we expect this to slightly disappoint.”

Lord Wolfson attributed the slowdown in growth to delivery improvements made at the start of last year, which have now annualised.

“Overall sales performance remains volatile, making it hard to draw conclusions from any one short period of time,” he said.

Next expects fourth quarter sales to increase in line with the year to date figure of 3.8 per cent.

It has also narrowed its full year profit forecast to £590m to £620m compared with £575m to £620m previously. The group has 500 stores in the UK & Ireland and 180-plus franchises and stores overseas.