Next Q3 sales rise 6 percent

Wednesday, 28 October 2015

REPORT Next Brand full price sales for the third quarter were up 6 percent, which the company said were just above the midpoint of its second half guidance range of 3.5 percent to 7.5 percent. Next retail sales increased 5.9 percent for the quarter and 2.6 percent, year on year. Directory sales increased 6.2 percent and year to date sales increased 7 percent.

Full prices sales reflect low consumer sentiment

The company said that full price sales growth by week demonstrates the continued volatility of consumer demand. September looked particularly strong but sales were flattered by poor comparative weeks last year. Retail had a good third quarter but its comparatives were much less demanding than Directory.

Total Next Brand sales including markdown sales for the quarter were up 7.3 percent, as markdown sales grew faster than full price sales. Total sales for Next Retail were up 5.4 percent and Next Directory sales were up 9.8 percent. Next said Directory total sales grew faster than full price sales due to the timing of the Directory summer sale, more of which was sold in the second half of the year.

Full year guidance remains unchanged

The company’s guidance for the full year remains broadly unchanged and it now expects Group profit before tax to be in the range 810 million pounds (1,239 million dollars) to 845 million pounds (1,292 million dollars). Total full price Next Brand sales growth is expected to be from 4 to 6 percent and earnings per share growth of 3.9 percent to 8.4 percent.

This guidance is based on 52 weeks for the years ending January 2015 and 2016. The current financial year will actually be the 53 weeks to January 30, 2016 and the company estimates the additional week will add approximately 15 million pounds (22.9 million dollars) to profit before tax.

As announced in its July trading statement, Next will pay a further special dividend of 60 pence per share on November 2, 2015. In its Christmas trading statement, Next will issue guidance for next year’s profit, a corresponding share buyback price limit and the company’s expected surplus cash generation.

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