Next Q1 retail sales down, but “encouraging” signs

UK: Next Q1 retail sales down, but “encouraging” signs

By Richard Woodard | 2 May 2012

Q1 retail sales down 3.9%
Directory sales up 11.8%
Next brand sales up 1.4%

Fashion retailer Next posted a retail sales decline of 3.9% for the 13 weeks to 28 April, but was boosted by a double-digit revenue increase for its Directory business.

The company said the figures were consistent with its first half guidance of sales rising by 1-4%, but pointed out that first quarter comparisons with last year’s warm weather and the Royal Wedding were tough.

“We remain confident that Next brand sales for the first half will remain within our +1% to +4% guidance range, and we are forecasting that profit for the first half will be ahead of last year,” Next said.

For the full year, Next is forecasting sales to rise by 1-4%, resulting in pre-tax group profit of GBP560-610m, which would represent anything from a 2% decline to a 7% increase in profit.

Simon Chinn, lead consultant at analyst Conlumino, said of the figures: “While last month may have been a complete wash-out and further dampened sales of its spring/summer collection, the outlook for the quarter ahead looks more encouraging with the upcoming Jubilee and summer sporting events likely to provide some boost to its seasonal ranges.

“As Next is one of the sponsors of the Olympics and is selling official merchandise for the Games, it will be counting on that patriotic spend to help boost retail sales in the next quarter.”

Sectors: Apparel, Finance, Retail