Next ups profit forecast on strong first half

Clothing retailer Next has raised its profit guidance for the full year after strong half-yearly results, with particular success online.

The fashion company – seen as an indicator of the health of the retail sector – also said profits would be higher than expected.

The retail juggernaut has thundered on in recent years, even as rivals have struggled with fickle consumer demand, the shift to online sales and fierce competition on clothing prices.

Next raised its full-year pre-tax profit guidance to between £805m and £845m from a previous range of between £785m and £835m and lifted its sales guidance range to growth of between 3.5% and 6% up from a previous forecast of between 1.5% and 5.5%. Total sales including markdown sales were up +3.3%. We believe the improvements experienced at the end of the season were mainly driven by warmer weather.

Shares in Next, up 17 percent over the last year, closed Monday at 7,500 pence, valuing the business at 11.4 billion pounds.

Full-year sales guidance is now for growth of 3.5pc to 6pc.

LONDON, July 28 (Reuters) – Next, Britain’s second-largest clothing retailer, nudged up its annual sales and profit forecasts after beating its own guidance for first-half sales growth, boosted by warm weather in June and July. “The mid-point of our profit guidance is very close to the current market consensus”. Total shareholder returns are being estimated at between 8.3pc and 13.4pc.

SPECIAL DIVIDENDS AND SHARE BUYBACKS: During the first half our share price has remained above our buyback price limit of £68.27, so we have not used surplus cash to retire any shares in the period.