Next sales forecasts edge up

Next, which trades from more than 500 shops in Britain and Ireland, about 200 mainly franchised stores overseas and its Directory catalogue and internet business, said full-price sales rose 6 per cent in the quarter to Octocber 24.

That outcome is just above the mid-point of its second-half guidance range of up 3.5 per cent to 7.5 per cent and compares to first half growth of 3.5 per cent.

Full price sales at Next’s stores rose 5.9 per cent. They were up 6.2 per cent at the Directory business. Trade in September was strong while October was relatively subdued.

Next has outperformed peers, including market leader Marks & Spencer, for a decade due to a strong online business, rapid expansion at home and abroad and diversification into new product areas, such as homewares.

Shares in the firm were down 1 per cent at 78.63 pounds at 0736 GMT, valuing the business at £12bn.

“With the share price up 20 percent plus over the last year compared to a flat wider FTSE-100 index, the valuation is seen as arguably up with events near to medium term,” said Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers.

Next forecast a 2015-16 pre-tax profit of £810m to £845m. It was previously forecasting £805m to £845m.

Full-year sales growth was forecast at up 4-6 percent. Previously it was 3.5-6 percent.

The firm has a well-established policy of returning surplus cash to shareholders through share buybacks or special dividends. As announced in its July update it will pay a special dividend of 60 pence per share on November 2.