LONDON (Alliance News) - Clothing and homeware retailer Next PLC Wednesday raised its profit and sales guidance forecasts for the year ahead, after reporting strong sales growth in the first quarter of the year from both its retail stores and online business.
Next revised up its full-year guidances for both sales and profit growth for the current financial year, as the group continues to be powered forward by a familiar set of drivers - the addition of net retail space, an increase in costs savings offsetting cost inflation, and more importantly an increased profit from its online and catalogue business called Next Directory.
Back in March, the retailer said it was forecasting total brand sales growth of between 4% and 8%, with 5% to 11% growth in its full year pretax profit of between GBP730 million and GBP770 million.
However, Next said Wednesday that is is now guiding total brands sales growth of between 5.5% to 9.5%, with an 8% to 14% increases in its pretax profit to between GBP750 million and GBP790 million.
The retailer also raised its guidance for earnings per share, as it now targets growth of between 8% and 14%, up from the 5% to 11% guidance it gave last month.
"This new guidance might look conservative in the light of the first quarter's performance. However, we always expected the first quarter to show above-average sales growth as the comparative period last year suffered from a particularly cold Spring and Easter Holiday period," the retailer said in a statement.
Next said that brand sales for the 13 weeks to April 26 were up by almost 11% on the year before, 2.2 percentage points of which it said came from the opening of new retail space. During the period, retail sales from its stores rose 8.8%, while its online and catalogue business called Next Directory saw sales rise almost 14%, as Next continued to pump investment into its online business by improving UK delivery services, expanding its online product offer, and investing in overseas markets such as China and Hong Kong.
The retailer said its shares consistently traded above GBP62.45 per share in the first quarter and, as a result, will now return surplus capital to shareholders through a third special dividend of 50 pence per share.
"The mid-point of our new profit before tax guidance is now GBP770 million and accordingly we are increasing our buy-back price limit, in line with this guidance, to GBP64.00," the company said.
Next shares were amongst the biggest gainers amid a flat open in London Wednesday, up 1.1% at 6,555.00 pence per share.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.
Next (NXT)
