Next shrugs off rain and beats profit forecasts

 
Kasmira Jefford
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SHARES in Next leapt almost seven per cent yesterday after the fashion retailer raised its profit guidance and beat targets for first-half sales growth, boosted by a stellar performance at its online Directory business.

The company, which trades from over 500 stores in the UK and Ireland and nearly 200 stores overseas, said total sales rose 4.5 per cent in the first half of the year, beating the one to four per cent rise it had previously forecast.

Some 2.5 per cent of the growth was due to new store openings.

While retail sales edged up a mere 0.2 per cent, its online and home shopping business Next Directory made up the difference, delivering growth of 13.3 per cent.

A “strong all-round performance” led Next yesterday to increase its full-year profit forecast. It now expects to make a pre-tax profit of between £575 and £620m, up from a previous guidance of £560m and £610m.

Stock for the company’s “End of Season Sale” was up by 8.7 per cent, although Next said cash recovery is in line with management’s forecasts.

Analysts immediately drew comparisons yesterday between Next and its rival Marks & Spencer, which reported weak figures last month and has been losing market share in its core womenswear division.

Next has thrived on bolstering its online platform and increasing its customer base overseas as well as branching into homeware and opening new larger concept stores.