Shares in Next (LON:NXT) have rallied in London this morning as the group’s sales beat the retailer’s guidance in the run-up to Christmas. As a result, the company has lifted its profit expectations for the current year.
As of 08:13 GMT, Next’s share price had soared 8.76 percent to 4,909.00p, giving a boost to the benchmark FTSE 100 index which currently stands 0.03 percent higher at 7,650.20 points. The retailer’s shares have lost more than two percent of their value over the past year, as compared with an over seven-percent rise in the Footsie.
Next posts upbeat results
Next announced in a statement this morning that its full-price sales had climbed 1.5 percent year-on-year in the 54 days to December 24, marking an improvement on the group’s November guidance of a 0.3-percent decline. The retailer noted that both its retail stores and online segments had experienced an improvement in sales, with its online business having performed particularly well. Next attributed the upbeat performance partly to the colder weather in the run-up to Christmas.
The blue-chip group further noted that the better-than-expected full price sales meant that the company was upgrading its profit guidance by £8 million to £725 million. Next noted that its profit guidance range now stood between £718 million and £732 million.
Challenges to continue
Next, whose performance has suffered over the past couple of years due to a shift in consumer spending, cautioned in the statement that many of the challenges it faced last year looked set to continue, including a decline in real income, the increase in experiential spending at the expense of clothing, and inflation in cost prices.
“However, we believe that some of these headwinds will ease as we move through the year,” the company pointed out.
Next has kicked off the reporting season for retailers, with Sainsbury’s (LON:SBRY) scheduled to update investors on its Christmas performance next Wednesday, to be followed by Tesco (LON:TSCO) on Thursday.