Next ups full-year profit forecast

Stronger sales in late September and early October made up for the unusually quiet start to August, Next said today as it revealed its performance for the third quarter to October 27.

Next Retail sales rose 1.1%, Directory sales were up 5.6% and Next brand sales were up 2.7%. Year-to-date figures rose 0.5%, 10.4% and 3.8% respectively.

The company said the difference in the performance of Retail and Directory had narrowed, mainly because Directory had now annualised the benefits of the delivery improvements made at the start of last year.

Next said its overall sales performance remained volatile, making it hard to draw conclusions from any one short period of time.

“We expect total sales in the final quarter to increase broadly in line with sales for the year to date. Accordingly, we are narrowing our full year sales guidance to a range of +3.0% to +4.5%,” it said.

It upped its forecast for full-year group pre-tax profit to be in the range £590m to £620m; the previous forecast was £575m to £620m.

Next is currently rolling out its new Next Home and Garden superstore format, which combines a Next fashion offer with homewares, DIY products and a garden centre. The first of the new-style outlets opened last August in Shoreham, West Sussex, the second in Ipswich this June, and a third is due to launch soon in Warrington.

The company has said it has identified 19 other sites around the UK where it would like to open similar stores, describing the trailblazing Shoreham store as “extremely successful”. Press reports suggested it had the best Sunday trading figures of any of its stores.

Next also has 43 Home stores, which it says are “extremely profitable and provide an efficient return on capital invested. The Home standalone portfolio makes a 21% net branch profit.”