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UPDATE 1-Next defies retail gloom with sales rise
August 1, 2012 / 6:40 AM / 5 years ago

UPDATE 1-Next defies retail gloom with sales rise

* H1 total sales up 4.5 pct vs guidance up 1-4 pct

* H1 retail sales up 0.2 pct vs guidance flat to down 3 pct

* H1 Directory sales up 13.3 pct vs guidance up 9-12 pct

* Ups FY pretax profit guidance to 575-620 mln stg

LONDON, August 1 (Reuters) - Next, Britain’s second-biggest clothing retailer, beat its target for first-half sales growth, helped by a particularly robust performance from its Directory home shopping business as the wet summer weather encouraged shoppers to go online.

The firm, which trades from over 500 stores in the UK and Ireland, nearly 200 stores in over 30 countries overseas, and the Next Directory online and catalogue business, also said on Wednesday it was modestly increasing and narrowing its sales and profit target ranges for the 2012-13 year.

Next said its total sales rose 4.5 percent, excluding VAT sales tax, in the six months to July 28.

That compares with a company objective of an increase of 1-4 percent and a rise of 1.4 percent in its first quarter.

First half retail sales rose 0.2 percent versus guidance of flat to down 3 percent, while Directory sales increased 13.3 percent compared with guidance of up 9-12 percent.

Next, the official clothing and homeware supplier to the London 2012 Olympic Games, said it now anticipated total sales growth in 2012-13 of 2-4.5 percent and group profit before tax of 575-620 million pounds ($901-971 million), up from a previous expectation of 560-610 million pounds.

After a 200 million pounds share buy back it expects full year EPS to grow by 6 percent more than the growth in pretax profit.

Although inflation and unemployment are falling many British retailers are still struggling as consumers grapple with sluggish wage growth and government austerity measures and worry about a stagnant housing market and fallout from the euro zone debt crisis.

Next has generally defied the gloom, helped by its strong online offer, a constant stream of new store openings and its diversification into homewares and overseas.

Shares in Next, which have risen over a third in the last year, closed Tuesday at 3,232 pence, valuing the business at about 5.33 billion pounds ($8.35 billion).

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