(Adds detail, CEO comments, shares)
LONDON, April 30 Next, Britain's second
biggest clothing retailer, raised its guidance for annual sales
and profit after posting strong trading in its first quarter
that reflected better weather in the run up to the late Easter
Next, which trades from over 500 stores in Britain and
Ireland, almost 200 stores in more than 40 countries overseas,
and via its Directory internet and catalogue business, said on
Wednesday it now expected a 2014-15 pretax profit of 750-790
million pounds ($1.26-$1.33 billion).
That compares to previous guidance of 730-770 million
pounds, and would represent growth of 8-14 percent on the 695
million pounds made in 2013-14.
Shares in Next, which have risen 49 percent over the last
year, were up 2.3 percent at 6,632.4 pence at 0718 GMT, valuing
the business at 10.2 billion pounds.
Next's total sales rose 10.8 percent in the 13 weeks to
"It was a little bit ahead (of internal expectations) but
last year retail had really poor weather - a big freeze in early
February, a very cold and early Easter. This year Easter was
late and warm," Chief Executive Simon Wolfson told Reuters.
Next said sales at stores rose 8.8 percent, while Next
Directory sales were up 13.7 percent.
The firm raised its full-year sales growth guidance to
5.5-9.5 percent from 4-8 percent previously and its earnings per
share growth guidance to 8-14 percent from 5-11 percent.
Britain's recovery from its deepest recession in decades
passed a milestone earlier this month when official data showed
wages growth caught up with inflation for the first time in
nearly four years, while unemployment sank to a five-year low.
Data on Tuesday showed Britain's economy racked up its
strongest annual growth in more than six years in early 2014.
Wolfson, who sits in Britain's upper house of Parliament and
is a prominent supporter of the prime minister's Conservative
Party, said although there were signs the economy was improving
he remained concerned about the prospect of interest rate rises
and house price inflation getting out of control.
"There is evidence, particularly in the south east (of
England), of a property bubble. There's no question that when
interest rates go up that will moderate the recovery," he said.
Wolfson noted that Next's demographic was particularly
exposed to interest rates.
"A 25 to 40-year-old customer with children is more likely
to be exposed to rising interest rates than a younger or older
customer so Next is particularly vulnerable to rising interest
rates," he said.
Next also said on Wednesday it will pay another special
dividend, its third this year, of 50 pence.
It will distribute surplus cash through more special
dividends as long as its share price remains above 6,400 pence.
($1 = 0.5936 British Pounds)
(Reporting by James Davey, Editing by Paul Sandle and Kate