Next share price rallies as retailer’s Christmas sales rise

Shares in Next (LON:NXT) have jumped in London this morning, with investors reacting positively to a rise in the retailer’s sales over the crucial Christmas period. The blue-chip group, however, trimmed its full-year profit guidance.

As of 08:56 GMT, Next’s share price had added 3.52 percent to 4,324.00p. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index having fallen into negative territory and currently standing 0.26 percent lower at 6,716.41 points.

Next updates on trading

Next announced in a statement today that its full-price sales for the period between October 28 and December 29 had been in line with the group’s September guidance, or 1.5 percent higher compared to last year. The company said that it had benefitted from a good half-term holiday week at the end of October which helped make up for disappointing sales in November.

Going forward, the bleu-chip retailer expects full price sales growth of +3.2%, in line with its September guidance. The group, however, lowered its full-year profit guidance from £727 million to £723 million, pointing to higher sales on seasonal products which reduced margin by £1.5 million, and a £2.5-million reduction from the increased operational costs associated with the higher Online sales.

Analysts weigh in on results

Proactive Investors quoted Shore Capital as commenting that Next’s trading performance was good considering the pressure retailers are under from subdued consumer spending and online competition. 

“Given the macroeconomic environment and difficult clothing market through the Autumn, management should be applauded for such a credible trading update,” the broker pointed out, cautioning, however, that consumer sentiment was at its lowest in five years over ‘Brexit fatigue’. 

“Like, the company, we believe that we need to get through calendar Q1 and understand the political and economic backdrop of any potential Brexit deal,” ShoreCap concluded, as quoted by the newswire.

As of 09:03 GMT, Thursday, 03 January, NEXT plc share price is 4,359.00p.