Next share price slides despite rise in sales

Next’s (LON:NXT) share price has fallen deep into the red in London this morning, even as the company posted a rise in total sales and profit for the first half of its financial year. The blue-chip group, however, revealed a fall in retail sales.

As of 09:08 BST, Next’s share price had given up 4.25 percent to 5,907.70p. The group’s shares are underperforming the broader UK market, with the benchmark FTSE 100 index having climbed marginally into positive territory and currently standing 0.20 percent higher at 7,328.92 points.

Next posts interim results

Next announced in a statement this morning that its total sales had climbed 3.7 percent to £2.06 billion in the half year ended July. The group saw a 12.6-percent rise in online sales which helped offset a 5.5-percent drop in retail sales. The retailer further posted a 2.7-percent rise in profit before tax, while earnings per share came in 7.5 percent higher. Next declared an ordinary interim dividend of 57.5p per share, up 4.5 percent on last year.

Brexit comments

The BBC meanwhile quoted Next’s chief executive Lord Wolfson as commenting on Brexit, reiterating that prices will fall two percent as new tariff rates would reduce its import duty costs by £25 million as savings from lower worldwide tariffs would significantly outweigh the additional cost of new tariffs on EU goods.

He noted that ‘relatively little’ of the company’s stock arriving or leaving the UK does so via the Dover Calais route and “as a precaution we have already taken measures to move most of that traffic to alternative ports or airports”.

Analyst ratings update

Liberum Capital reaffirmed the blue-chip retailer as a ‘buy’ today, without specifying a target on the Next share price, while Shore Capital continues to see the company as a ‘hold’. According to MarketBeat, the FTSE 100 group currently has a consensus ‘hold’ rating and an average valuation of 5,744.44p.