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* Q3 full price sales up 2.0%
* Oct sales up 5%
* Full year guidance maintained
* Shares down 2.4%, up 68% this year
(Adds detail, analyst comment, shares)
LONDON, Oct 30 (Reuters) - British clothing retailer Next
said sales picked up in October after a poor start to
autumn trading, though it cautioned it did not expect growth for
the rest of the year to be as strong as this month's.
Shares in Next were down 3% at 0908 GMT on Wednesday on the
outlook, paring gains for the year so far to 67%. The stock hit
a 52-week high on Oct. 17.
The group, which trades from about 500 stores in the UK and
Ireland, about 200 stores in 40 countries overseas and its
Directory online business, maintained its profit and sales
guidance for the full 2019-20 year.
It said full price sales including interest income rose 2.0%
in its third quarter to Oct. 26, slightly ahead of a forecast
given in September.
Last month Next had reported a "disappointing" start to
autumn trading, attributing it to unusually warm weather in
parts of Britain rather than shoppers holding back on buying new
clothes due to uncertainty over Brexit.
The group said it believed that strong sales in July pulled
forward sales from August. It said that while sales in September
were adversely affected by the warm weather, it saw a
significant improvement in October, with sales up 5%
year-on-year, when temperatures fell.
"We believe the improved sales growth in October recouped
some of the lost sales in September and we do not expect sales
growth for the rest of the year to be as strong as October," it
added.
STRUCTURAL SHIFT
Next's third-quarter outcome continued to illustrate the
clothing industry's structural shift from physical stores to
online. While sales in Next's stores were down 6.3%, online
sales were up 9.7%.
Next says its stores will remain profitable even if they
become less productive.
For 2019-20 Next foresees full-price sales up 3.6% and
pretax profit of 725 million pounds ($934 million), a 0.3% rise
on the 2018-19 outcome, with earnings per share growth of 5.2%,
reflecting share buybacks.
There was no commentary in Next's update on the anticipated
impact on Christmas trade of Brexit being delayed to Jan. 31
2020 and a national election being held on Dec. 12.
Analysts at Peel Hunt said a Dec. 12 election date is not a
bad one for the industry.
"Black Friday (Nov. 29) may be slightly affected by
pre-match nerves, but a clear (election) outcome may be enough
to give the sector a fillip into Christmas and the key big
ticket selling period," they said.
Next CEO Simon Wolfson, a prominent Conservative "Leave"
supporter who sits in the upper house of Britain's parliament,
has said Brexit will only materially affect consumer spending in
the event that it triggers inflationary pressure on prices or
logistical problems at British ports. Next does not expect its
own prices to rise.
($1 = 0.7763 pounds)
(Reporting by James Davey; editing by Sarah Young and Louise
Heavens)
