Next raises profit forecast after Christmas sales
Fashion chain Next expects to beat annual profit forecasts after better-than-expected Christmas sales, it said on Wednesday, sending its shares as much as 8 percent higher.
The fast-growing chain remained cautious about its prospects, however, saying that cold weather, rather than an underlying improvement in consumer sentiment, had driven a recent recovery in sales.
Next, which sells mid-price clothing and housewares, said like-for-like sales in 251 stores unaffected by new openings nearby were down 3.2 percent year-on-year in the period from August 1 to December 24, 2005.
That was an improvement from the 6 percent decline reported for the six weeks to September 10, 2005, Next's worst sales figure for a decade.
Total sales were up 9.8 percent in the period to December 24, 2005 and Next said it now expected full-year profit before tax to be in the range of 435 million to 450 million pounds, compared with analysts' current estimates around 420 million pounds.
Next, the first major UK retailer to report its performance over the key Christmas period has long been one of the sector's strongest performers.
But a dismal trading update in September 2005 prompted speculation that it was losing ground to a resurgent Marks & Spencer, Britain's biggest clothing retailer.
Next remained cautious given the difficult retail environment, saying it was budgeting for like-for-like sales to continue to run around minus 3 percent over the next six months.
Next shares have underperformed the UK retail sector by 11 percent in the last 12 months, according to Reuters data.