Total NEXT Brand sales for the first half were up 4.5% (VAT exclusive). Management now anticipates Brand sales growth of +2.0% to +4.5%. Full year profit guidance was raised to between £575m to £620m (previously £560m to £610m).
Half year update: With a likely assist from the weather, the retailer reported sales growth which exceeded its own previous guidance. Total NEXT Brand sales for the half year grew by 4.5% (VAT exclusive), ahead of management's prior guidance of +1% to +4%. Total Directory sales grew by 13.3%, aided by consumers' apparent reluctance to venture out into the wet summer weather. At its high street Retail business, sales from new floor space more than compensated for a decline in same store sales - total Retail sales grew by 0.2%. As such, management was able to increase its full year guidance for both sales growth and profitability. The share price rose by over 3.5% in early morning trading. In all, whilst the tough environment for consumers continues to weigh, Next continues to outpace rivals. Therefore, we believe that consensus analyst opinion of a strong hold could come under some upward pressure. Full half year results are scheduled for the 13 September (2012).
Next PLC is a British retailer with its headquarters in Enderby, Leicestershire. It is one of the United Kingdom's largest clothing retailers. The company has over 500 stores throughout the UK and the Republic of Ireland, and more than 180 branches in Europe, Asia and the Middle East. These are located at a mixture of high streets, shopping centres, and retail parks. Next sells some of its merchandise through the Next Directory, a home shopping catalogue launched in 1988. Other businesses include Next Sourcing, which designs, sources and buys Next branded products. The company is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.
Fashion chain Next said the Olympics has hit trading in its London stores, as tourists and locals stay away, leaving the capital a ghost town. Next is the first of the retailers to give a sense of current trading and will compound fears that the Games will fail to drag the UK out of recession. Next's chief executive, Lord Wolfson, said its 23 shops in London had been "adversely affected" and he does not expect any kind of retail boost from the Olympics. "The two weeks of the Games for retail won't be good. As with any sporting event, people tend to stay in and watch them on television rather than go out shopping." [The Guardian
Shares in Next (NXT) jumped by 208p to 3,427p after it reported a 4.5% rise in sales, year-on-year, for the 26 weeks ended 28th July, almost entirely due to 13.3% growth in online sales. As a result, the fashion retailer upgraded its full-year pre-tax profit target, from between 560 and 610 million pounds to between 575 and 620 million pounds. The group also reiterated its commitment to repurchase around 200 million pounds worth of shares during the year, noting that it has already bought back 3.9 million shares for 112 million pounds.
Total NEXT Brand sales for the first half were up 4.5% (VAT exclusive) against last year. This is at the top of the +1% to +4% guidance range given in our March and May statements. NEXT Retail sales were 0.2% up on last year, with sales from new space offsetting lower sales from like for like stores. NEXT Directory sales were up 13.3% on last year, another strong all round performance.
END OF SEASON SALE Total stock for the End of Season Sale was up 8.7% with cash recovery in line with our forecast.
FULL YEAR GUIDANCE TO JANUARY 2013 We are modestly increasing and narrowing our sales and profit guidance ranges for the full year. We now anticipate Brand sales growth of +2.0% to +4.5% and group profit before tax of £575m to £620m (previously £560m to £610m). The profit range and growth percentages exclude exceptional profits.
It remains our intention to buy back approximately £200m of shares this year, of which to date we have spent £112m buying 3.9m shares. The effect of share buybacks and lower UK corporation tax rates on these estimates is to increase EPS by approximately 6% more than the growth in profit before tax.
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