Fashion bellwether Next beat forecasts for the first half of the year, thanks to the warm weather in July. This is what the analysts said.
“A modest beat in full-price sales over the first half means an improvement to full-year guidance.
“Behind this, Next’s full-price trading stance means it was more than able to offset a weak May, and we believe this will once again result in a better gross margin out-turn relative to clothing peers.
“Improvements in trading within the Next Directory should reassure in our view that Next can continue to deliver in existing and growth channels.” – Alistair Davies, Investec
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“Next’s spring/summer trading benefited, as expected, from a warmer July, with a stronger performance from Next Directory in particular despite very tough comparatives.
“This is reflected in upgraded sales and profit guidance which banks the first-half beat and maintains the previous second-half guidance.
“Our forecasts and those of consensus were already in line with the new midpoint of the pre-tax profit guidance range (which has moved up 1.9%).” – James Collins, Stifel
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“A compelling performance has resulted in Next raising its full-year sales and pre-tax profit guidance and it now expects the latter measure to come in between 2.9% and 8.0% for the year ending January 2016.
“As a mature retailer this robust level of growth demonstrates Next’s ability to respond to ever-changing consumer demand, as well as to provide a product offer that is being continually revised and honed.
“However, with clearance levels for the period reportedly slower than the previous year it does need to exercise caution in its pricing activity, particularly with value-led retailers, such as the newly launched Pep & Co, continuing to influence the market and consumer expectations.” – Sophie McCarthy, Conlumino
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“Today’s second-quarter Next trading update (for the 13 weeks to July 25) has brought the news that full-price sales were up 3.5% over the full half-year, which is better than the 3% the City was expecting and better than the cautious 0% to +3% guidance range that Next gave in March.
“Next again show their famous graph that shows full-price sales growth by week and demonstrates the continued volatility of consumer demand.” – Nick Bubb, independent analyst
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