Shares in Next (LON:NXT) have rallied in London this morning, as the retailer lifted its sales and profit guidance, having seen ‘encouraging’ trading over the past three months. The company, however, posted a drop in half-year sales and earnings following a difficult six months.
As of 09:51 BST, Next’s share price had jumped 11.95 percent to 4,951.00p, helping lift the benchmark FTSE 100 index 0.02 percent higher to 7,381.34 points. The group’s shares have lost more than five percent of their value over the past year, and are down by a little over one percent in the year-to-date.
Next updated investors on its interim performance this morning, unveiling that its sales had dipped 2.2 percent to £1.9 billion in the half-year ended July. The company’s profit before tax meanwhile came in 9.5 percent lower at £309.4 million during the reported period, dragged down by a 33.1-percent slump in the group’s retail business. The group’s earnings per share dipped 6.2 percent to 176.9p.
Despite the downbeat results, Next noted that the last three months had given it some ‘encouragement’, and it therefore ‘marginally’ upgraded its full price sales range. The company also hiked the mid-point of its profit guidance by £7 million to £717 million.
“While the external environment looks set to remain difficult, from where we stand today our prospects going forward appear somewhat less challenging than they did six months ago,” the group’s chief executive Lord Wolfson commented in the statement, adding that the company also looked set to generate around £53 million of surplus cash over and above the £257 million it intended to distribute by way of special dividends.
Today’s results come after Next announced last month that it had seen a small rise in sales in the second quarter of its financial year, and further unveiled plans to distribute a special dividend to shareholders.