REPORT_ Total retail sales at Next for the half year ending July 2014 were 7.5 percent ahead of last year. Full price sales were up 8.6 percent, while markdown sales (the sales from our mid-season and end-of-season Sale) were down -3.8 percent.
Commenting on the development, Lord Wolfson, Chief Executive at Next said, “Next has had a good first half, achieving sales and profits ahead of our original expectations. Total sales were 10.3 percent ahead of last year. Retail stores and Next Directory (our online business) both delivered significant growth. Profit before tax rose by 19.3 percent. Strong cash generation has enabled us to return 223 million pounds (361.3 million dollars) to shareholders through three special dividends, of which two were paid in the first half. A further 105 million pounds (170.1 million dollars) has been returned through share buybacks, in addition to ordinary dividends.”
Trading space increased by 107,000 square foot in the first half of the year. During the last six months, company begun trading online in 11 new territories including Cyprus, Malta, Saudi Arabia, Belarus and China. Next now trades in 71 countries, the top ten of which account for 78 percent of its overseas turnover. It now expects to open around 350,000 square feet in the full year. Operating margin improved by 1.8 percent, from 12.4 percent to 14.2 percent.
By the end of the current year, Next plans to relocate and expand shops in Skipton, Bath, Northampton and Bolton, while expanding presence in at least twenty five more towns and city centre stores.
Directory sales were 16.2 percent ahead of last year. Sales in the UK grew by 11.5 percent while sales overseas increased by 80 percent. Next has a portfolio of 16 directly owned stores outside the UK and Eire which taken together broadly break even. It does not expect any significant change in its directly owned international store numbers or locations in the near future.
Company’s franchise partners operate 182 stores in 38 countries and expects international retail to make a profit of 13million pounds (21 million dollars) for the year. Lipsy, womenswear fashion business, increased sales to 31million pounds (50.2 million dollars) and trading profit to 2.5million pounds (4 million dollars) in the first half. Company anticipates further growth in the second half. It expects full year sales and trading profit to be in the range of 70million pounds (113.4 million dollars) and 6.5million pounds (10.5 million dollars) respectively.
Next has maintained the sales and profit forecast issued in its July trading statement. It estimates that the third quarter will grow by over 10 percent and the fourth by over 4 percent.