First-quarter sales ahead on guidance at Next

Next, Britain’s second biggest clothing retailer, maintained its annual profit forecast after posting first-quarter sales slightly ahead of its own guidance and said it would pay another special dividend.

Next store.

The group, which trades from over 500 stores in Britain and Ireland and almost 200 stores overseas as well as the Directory catalogue and internet business, said full price sales rose 3.2 percent in the 13 weeks to April 25.

That was ahead of company guidance for the first half of flat to up 3 per cent.

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Next said sales in the first quarter were flattered by the earlier launch of its summer “New-In” brochure, which helpfully coincided with much warmer weather. It estimated this timing effect increased its reported number by around 0.6 per cent.

Full price retail sales were up 0.5 per cent, while Directory sales were up 7.0 per cent.

The firm said total sales were up 4.1 per cent, reflecting a better winter end-of-season sale and a larger mid-season sale in Directory.

Last month Next cut its sales guidance for 2015-16, highlighting weaker collections and tough comparative numbers in the spring and summer.

That guidance was maintained - total full price sales of 1.5-5.5 per cent in the year to end January 2016.

Pretax profit is forecast at £785-835m, growth of 0.4-6.7 per cent.

During the first quarter Next’s share price remained above its buyback price limit of £68.27, so it did not use surplus cash to retire any shares in the period.

The firm will therefore pay a further special dividend of 60 pence per share on August 3.