UK: Next outperforms markets and ups FY guidance
- Ups full-year sales and earnings guidance
- Total sales grow 10.7%
- Retail sales up 7.5%
Next raised its full-year sales and earnings guidance
Next's share price climbed 2.5% this morning (29 July) as the UK retailer upped its full-year earnings guidance and "significantly" outperformed the market in its second-quarter.
The retail group said it expects to record a pre-tax profit of GBP775m (US$1.31bn) to GBP815m for the full year to January 2015. This compares with previous guidance of GBP750m to GBP790m.
Next also raised its full-year sales guidance to 7% to 10% from a previous forecast of 5.5% to 9.5%.
The news pushed the retail group's shares up 2.53% to 6,685 pence at 09:00 GMT this morning.
Next's total sales rose 10.7% in the 26 weeks ended 26 July, of which 2.4% came from the opening of new space. Retail sales were up 7.5%, while Next Directory sales increased 16.2%.
"It might appear overly cautious to forecast a full-year sales range which is below our current rate of growth," Next said. "However, last year's first two quarters were hampered by a particularly cold Spring and Easter which presented a soft comparison for this year. This pattern makes estimating second half sales particularly difficult so our guidance for the next six months is for growth of between 4% and 10%."
Cantor Fitzgerald analyst Freddie George said the update indicates Next has "significantly outperformed the market" in a more difficult quarter than Q1 and was "significantly better" than expectations.
"Following this update, we are revising upwards our FY15 pre-tax profit forecast by GBP25m to GBP805m and our FD EPS forecast from 379p to 391p," he noted.
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