UK: Next "dazzles" as FY profit soars 17%
- FY profit after tax up 16.9% to GBP553.2m
- Sales rise 5.4% to GBP3.74bn
- Directory sales jump 12.4%
Next is to move away from a two season buying cycle to a four season cycle
Analysts have described Next's full-year results as "dazzling" after record sales helped the UK fashion retailer to book a double-digit profit increase.
Profit after tax reached GBP553.2m (US$915m) for the year to January, up 16.9% on GBP473.1m in the same period of the prior year.
Sales grew 5.4% to GBP3.74bn from GBP3.55bn last year, while retail sales climbed 1.7% and Next brand sales were up 5.5%.
The group's Directory business saw sales jump 12.4% during the period, with the UK and international markets contributing a respective 8.5% and 3.9% to the growth. But with a turnover of more than GBP100m, Next said its overseas online business is "still relatively small".
The retailer buys more than 40% of its products through its Next Sourcing business, which saw sales increase 13% to GBP571.2m.
Next revealed it will move away from a two season buying cycle to a four season cycle. The aim, it said, is to increase the availability of cold weather clothing in January, February and March and warm weather clothing in August and September.
Commenting on the performance, chairman John Barton said: "Our strategy remains the same, focused on our products, our profitability and returning cash to our shareholders. Notwithstanding the continued pressure on the UK consumer, we anticipate another year of growth for Next."
Meanwhile, Conlumino analyst Anusha Couttigane noted: "Next's dazzling full year results will come as little surprise to most people."
The secret to the retailer's success, she added, is its "frequent self-evaluation and the swift implementation of strategies to mitigate potential pitfalls".
While its international business remains "a small cog in a vast engine, it will offer Next a ripe opportunity for growth when it finally exhausts its UK potential," Couttigane added.
An interactive databank with intelligence on the major apparel sourcing countries
- Yuan devaluation impact mixed for garment firms
- Will Vietnam struggle with impending trade deals?
- Nicaragua apparel and shoe firms to double in size
- The new age of disruption on apparel production
- Supply chain improvements to save Billabong $30m
- H&M scaling up living wage effort to key suppliers
- Myanmar approves first minimum wage
- US Q2 in brief: Oxford, G-III, Shoe Carnival
- EU clothing buyers should brace for higher prices
- PVH “well-positioned” in China despite headwinds
- Global Database of the Top 1000 Apparel Producers - Company Names, Financial Performance, and Contact Details
- Myanmar's Garment Sector in 2015 - now with updated members' directory
- Ethiopia – the emerging textile and clothing industry
- Global market review of lingerie - forecasts to 2020
- Global market review of denim and jeanswear – forecasts to 2020