Shares in Next fashion chain jump 2.7pc on back of stronger profits
Shares in fashion retailer Next jumped 2.7pc in London yesterday after it upped its profit guidance following better-than-expected gross margins.
The company, which has shops in Ireland and the UK, said it now expected to deliver a profit in the full financial year to the end of January of between £611m and £625m (€753m to €770m). It had originally anticipated that profits would be between £590m to £620m.
Delivering a trading update yesterday, Next said there had been "little change" in the consumer environment since October.
"Sales growth in the fourth quarter has been in line with the rest of the year and in line with the forecast we gave in our October statement," it said.
But Next said other factors had improved the profit outlook for the financial year.
"Although sales have been in line with expectations, cost control measures, markdowns and gross margins have all been slightly better than expected," it said.
Sales at Next retail outlets between November 1 and December 24 rose 0.8pc, while its online Next Directory arm posted an 11.2pc rise in sales in the same period.
"We think it unlikely there will be any dramatic change in the consumer environment," said Next of the UK environment. "Healthy employment numbers mean there is little risk of a significant downturn. On balance, we expect the consumer environment to remain subdued but steady."
"We believe the company was one of the winners over Christmas helped by a strong range geared to the colder weather," said analyst Freddie George at Seymour Pierce. "Next is highly cash generative, tightly run and looks to continue to execute on the basics of giving the consumer great product and capitalising on its leading multi-channel position."