Next has reported 3.9% rise in sales in the months of November and December, enduring difficult weather conditions. The second largest clothing retailer in Britain has forecast upbeat profits to range between £611m – £625m for financial year end, from its earlier estimate of £590m – £620m. The pre-tax profits are expected to increase 7.1%- 9.6% in the 2012 profits as compared with previous year.
The retailer reported that in the year to December 24, Next Retail’s sales were up 0.6% and Next Directory’s sales were a whopping 10.5% higher. Strong online performance market the retailer’s profits as Next Directory posted 11.2% rise in revenues between November 1 and December 24. Next’s in-store performance also exceeded expectations by a marginal 0.8% rise over the previous year.
This year, Next, which has more than 500 shops, plans to create a further 250,000sq ft of retail space, including a net increase of 10 new shops, and will continue to grow its Directory operation in the UK and overseas. For the forthcoming financial year, Next has forecast sales growth of between 1.5% and 4%, with profits up in line with sales and a further £250 million of share buy backs.
With the boost in sales, Next advanced in the UK stock market, up 2.3% to £38.58, the best level the shares have ever reached since listing in 1982. Next has defied the gloom and shares in retailer rose 38% last year. Next said that the sale had started well and the final clearance rates in line with last year’s estimates.
Regarding its forecast for the next financial year, Next said in a statement, “We think it is unlikely there will be any dramatic change in the consumer environment in the year ahead. Healthy employment numbers mean that there is little risk of a significant downturn. However, the continued growth in price inflation ahead of wage inflation means that real wages will continue to fall, albeit at a slower rate than last year. On balance, we expect the consumer environment to remain subdued but steady.”