Britain's Next ups profit forecast as sales rise
LONDON (Reuters) - Next (NXT.L), Britain's No.2 clothing retailer, nudged its full-year profit forecast higher on Thursday as it reported a rise in sales in the run-up to Christmas along with better margins.
Kicking off the post-Christmas UK retail reporting season for listed companies, Next, which has a long standing policy of never going on sale before Christmas, said it expected a year to end-January 2013 pretax profit of 611-625 million pounds ($995-$1.02 billion).
Its previous guidance was 590-620 million pounds.
"Although sales have been in line with our expectations, cost control measures, markdowns and gross margins have all been slightly better than expected," the firm said.
With Britain facing the prospect of a triple-dip recession, many retailers have been finding the going tough as consumers fret over job security and a squeeze on incomes.
Next has generally defied the gloom, helped by its strong online offer, a constant stream of new store openings and diversification into homewares and overseas markets.
Next said total sales, excluding VAT sales tax, rose 3.9 percent in the November 1 to December 24 period.
That compares with an increase of 2.7 percent in its third quarter, giving a year to date rise of 3.9 percent - in line with guidance of 3.0 to 4.5 percent.
Sales at Next's over 500 stores in the UK and Ireland rose 0.8 percent in the November, December period while sales at the Directory home shopping business increased 11.2 percent.
The firm said its post-Christmas Sale had started well.
Next forecast earnings per share growth for the 2012-13 year of 14-17 percent, partly reflecting 241 million pounds of share purchases.
For the 2013-14 year the firm guided to sales growth of 1.5-4.0 percent, with profit up in line with sales and a further 250 million pounds of share buy backs.
"We think it is unlikely there will be any dramatic change in the consumer environment in the year ahead," it added.
Shares in Next, up 38 percent over the last year, closed Wednesday at 3,772 pence, valuing the business at 6.08 billion pounds. ($1 = 0.6141 British pounds)