MetiNews.Com Next rallies as better than expected sales drive another profit upgrade Breaking news

MetiNews.Com - Retail bellwether Next (NXT) continued to rally on Thursday, the shares bid up 2.2% to £63.06 after the clothing-to-homewares colossus upped profit guidance for the second time in two months on the back of better than expected sales.

MetiNews.Com Next rallies as better than expected sales drive another profit upgrade Breaking news

MetiNews.Com - Retail bellwether Next (NXT) continued to rally on Thursday, the shares bid up 2.2% to £63.06 after the clothing-to-homewares colossus upped profit guidance for the second time in two months on the back of better than expected sales.

MetiNews.Com  Next rallies as better than expected sales drive another profit upgrade Breaking news
17 September 2020 - 09:56

Breaking News ! Retail bellwether Next (NXT) continued to rally on Thursday, the shares bid up 2.2% to £63.06 after the clothing-to-homewares colossus upped profit guidance for the second time in two months on the back of better than expected sales. Despite reporting a 97% pre-tax profit plunge to £9 million for a lockdown-impacted half to July, Next is now guiding to full year pre-tax profit of £300 million, up from the £195 million steer given as recently as July. ANOTHER POSITIVE SALES SURPRISE In the thirteen weeks since stores reopened Next’s full prices sales have been better than anticipated, boosted by fewer people taking overseas holidays in August and the cool weather at the end of August which stimulated sales of autumn clothing. Next’s ‘central scenario’ assumes sales will be down 12% for the remainder of the year on the grounds that the end of the furlough scheme in October will bring additional economic pain, colder weather might worsen the effects of the pandemic and the measures required to contain it such as the recently introduced social distancing rule of six, if still in force in December, is likely to depress demand for gifts and clothing this Christmas. ONLINE CUSHIONS THE BLOW For the six months to July, group sales slumped 34% to £1.34 billion with retail sales down 61% to £345 million. Encouragingly however, online sales, which now speak for over 60% of the business, fared better with a 14% drop to £863 million. ‘Interestingly, sales online have been significantly stronger since our stores reopened than they were before the pandemic struck,’ explained Next. ‘It appears that some lockdown habits have stuck, and we have been able to take advantage of this shift to online.’ Furthermore, retail park stores, where customers can park and walk straight into relatively spacious stores which allow for social distancing, are holding up much better than city centre and regional shopping centre outlets.

. In today’s update, Next said it expects to reduce its debt by £462 million to £650 million by the end of January 2021, although given the continued uncertainty, dividends and share buybacks remain off the table for the current year in order to protect its balance sheet. WHAT THE EXPERTS ARE SAYING Shore Capital insisted Next ‘remains a well-managed company with a strong track record of financial and stock control with good cash generation. Next will be a retail survivor given its strong online presence and the strength of its balance sheet. Today’s statement highlights an improving sales trend, but we note the cautious outlook in their guidance, especially with their central expectation that recent sales performance could see another step backwards this Autumn.’ Russ Mould, investment director at AJ Bell, said: ‘You’ve got to hand it to Next. Even in a world where businesses are struggling and consumers face big uncertainties over their personal and financial health which arguably puts a cloud over their willingness to spend, Next is still managing to keep its head above water. ‘Increased profit guidance, a reduction in debt and a general fighting spirit all suggest Next is finding a clear path through the murky environment.’ Mould added that Next is ‘lucky to have already established a strong online presence pre-Covid so it has been able to capitalise on this year’s accelerated shift from the high street to the web in terms of how people buy goods and services.’ Julie Palmer, partner at Begbies Traynor (BEG:AIM), added that Next’s recent agreement to take Victoria’s Secret under its wing is ‘a sign that in this coronaclimate the stronger businesses will sweep up the weaker ones, bringing them into their network to expand while the best deals are available. It’s a smart move and one that shows Next is using the successes of recent years to fund an expansion to power itself out of a retail recession.’ READ MORE ABOUT NEXT HERE

Source = MetiNews.Com

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MetiNews.Com Next rallies as better than expected sales drive another profit upgrade Breaking news


MetiNews.Com Next rallies as better than expected sales drive another profit upgrade Breaking news


MetiNews.Com Next rallies as better than expected sales drive another profit upgrade Breaking news


MetiNews.Com Next rallies as better than expected sales drive another profit upgrade Breaking news

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