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.
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