Next shares hit fresh high over bumper Xmas

Kasmira Jefford
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SHARES in Next reached a record high yesterday after the high street clothing stalwart upped its full-year profit guidance and reported a strong rise in sales in the run-up to Christmas.

The UK’s second largest clothing retailer said it expected to make profit before tax in the range of £611m to £625m in the year to January 2013, which would be up 7.1 to 9.6 per cent on last year.

That compared with a previous forecast of £590m to £620m.

The stock market darling leapt to the top of the FTSE 100, with shares up 2.7 per cent to 3,873p – their highest level since listing 30 years ago.

Total sales excluding VAT rose 3.9 per cent between 1 November and 24 December. Store sales were up by 0.8 per cent, compared with 0.6 per cent for the year to date.

Next Directory, its online and mail order business, reported sales up 11.2 per cent in the period, recovering from a slowdown in the third quarter when they rose by 5.6 per cent.

Chief executive Lord Simon Wolfson said although sales were in line with expectations, cost control measures, markdowns and gross margins had all been slightly better than expected.

Profit growth, lower corporation tax rates and £241 worth of share buybacks should result in earnings growth of between 14 per cent and 17 per cent, the group said.

Commenting on the outlook for the year, Wolfson said it was unlikely there will be any dramatic change in the consumer environment in the year ahead. But with healthy employment numbers “there is little risk of a significant downturn,” he added.