Next share price soars as retailer returns to sales growth

Group unveils special dividend

Next share price soars as retailer returns to sales growth

Shares in Next (LON:NXT) have surged in London this morning, as the blue-chip retailer posted a small rise in sales for the second quarter of the year. The company further unveiled plans to distribute a special dividend to shareholders.

As of 09:39 BST, Next’s share price had jumped 6.94 percent to 4,298.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.28 percent in the red at 7,390.97 points. The group’s shares have lost more than 18 percent of their value over the past year, and are down by some 12 percent in the year-to-date.

Next announced in a statement this morning that its full-price sales had climbed 0.7 percent in the second quarter of the year, benefitting from an 11.4-percent jump at the group’s Directory catalogue and internet business. The retailer further attributed the return to growth to warm weather and lower markdown sales in the end-of-season sale.

Next’s underlying total sales in the second quarter, however, dipped 1.6 percent and came in two percent lower for the first half. Going forward, the blue-chip retailer said that it remained cautious, and was budgeting for second half full price sales to be down by 1.2 percent.

The company, however, cheered investors with a third special dividend of 45p per share, and said that it expected to generate £307 million of surplus cash for the year.

“Next said it now expects to deliver £307 million of surplus cash this year, having guided that to be £255 million in May,” Neil Wilson of ETX Capital said, as quoted by the BBC. “The leap in surplus cash has investors eyeing up more dividends.”

George Salmon, an equity analyst at Hargreaves Lansdown, meanwhile commented that “after the steady flow of bad news over the last 18 months or so, which has seen the shares halve from their 2015 highs, sales trends at Next have improved in recent weeks”.

“While this update provides a welcome tonic to shareholders, it's clear Next is still feeling the heat,” he pointed out, as quoted by the BBC. 

As of 09:56 BST, Thursday, 03 August, NEXT plc share price is 4,343.00p.

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