LONDON (Alliance News) - Next PLC Wednesday reported full price sales growth in the first quarter of 2015 that ran ahead of the guidance it gave for the first half as a whole, citing the earlier launch of its summer "New-In" brochure which "helpfully" coinciding with much warmer weather, but it still maintained its guidance for the full-year.
The fashion retailer, which last year overtook big rival Marks and Spencer Group PLC to become the UK's most profitable clothes retailer, has historically set guidance at the start of each year that it then goes on to beat and raise.
Next achieved a sixth consecutive year of annual pretax profit growth in its last financial year, but in March cut its full price sales growth guidance for the whole of current year to between 1.5% and 5.5%, from the 2.5% to 7.5% growth it had predicted in December. It predicted slower growth in international sales due to the issues in Russia and Ukraine, and said some of its product lines this year weren't performing as well as last year due to tough comparatives.
However, on Wednesday Next reported total sales growth of 4.1% in the thirteen weeks to April 25, and said full price sales for the quarter were up 3.2%, ahead of the 0% to 3% full price guidance it gave in March for the first half of the year. Full price sales growth of 1.9% in the first quarter came from new space it has opened.
It said total sales were up more than full price sales as its winter end-of-season sale went on for longer and it undertook a larger mid-season sale in its Directory business. Next Retail's total sales grew 0.5%, while Next Directory's total sales grew 9.2%, while full price sales rose 0.5% and 7.0%, respectively.
Still, the retailer said its pretax profit guidance for the full year to January 2016 remains unchanged at GBP785 million to GBP835 million, up between 0.4% and 6.7% on the previous year, while full-price sales growth guidance also remains unchanged at between 1.5% and 5.5%. It expects full price sales to rise between 3.5% and 7.5% in the second half of the year.
Next said it will pay a further special dividend of 60 pence per share, after its share price remained above the level at which it would consider a share buyback. It retained its guidance for a 2.1% increase in its ordinary dividend yield and 3.3% increase in special dividend yield for the year as a whole.
Shares in Next were trading up 2.7% at 7,360.00 pence Wednesday afternoon.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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