After a sluggish summer sales due to the Olympics, Next sales have picked up, allowing the British retailer to raise their profit guidance to the range of 3-4.5 percent. Third quarter sales rose a 2.7 percent. “Overall sales performance remains
volatile, making it hard to draw conclusions from any one short period of time. We expect total sales in the final quarter to increase broadly in line with sales for the year-to-date. Accordingly we are narrowing our full year sales guidance to a range of +3 percent to +4.5 percent.”
includes a 1.1 percent rise in Next stores, an acceleration in sales growth compared to the 0.5pc for the year-to-date, reminded ‘The Independent’.
However, there was also a downside, as directory sales, which includes the ecommerce business, rose just 5.6 percent, which was significantly below expectations.
“The difference in the performance of Retail and Directory has narrowed. We believe this is mainly because Directory has now annualised the significant benefits of the delivery improvements we made at the start of last year,” the company has explained in a statement.
Panmure Gordon analyst Jean Roche said in declarations to ‘The Guardian’: "Bears will point to the slowdown in Directory sales and bulls to the impressive pickup in retail sales. We are big fans of this blue blood multichannel retailer."
In the same vein, Caroline Gulliver at Espirito Santo explained that "This 10 percent swing in sales growth through the quarter correlates with good recent sales data from BDO, John Lewis and Debenhams and bodes well for other retailers yet to report, such as M&S."
Commenting the figures, James McGregor, director of the retail consultants Retail Remedy, pointed out that "While all about are losing their heads, Next have spectacularly kept theirs. There may be a brief pang of disappointment that their annualised Directory sales are not growing at the same extraordinary rate as before.”
"By anyone else's standards, 10 percent annualised growth is remarkable. But Next has set itself a very high bar - for a fashion retailer to deliver an annual profit of 600 million in the current environment is truly impressive,” McGregor concluded.