Next Q1 sales buoyed by improved conditions
Next's first-quarter sales growth was helped by warmer weather
Next Plc's first-quarter performance was buoyed by improved trading conditions, booking sales ahead of analyst expectations thanks to warmer weather and the earlier launch of the UK fashion retailer's summer brochure.
Total brand sales grew 4.1% during the 13 weeks to 25 April, thanks to a longer tail to its winter end-of-season sale and a larger mid-season sale in directory.
Full price sales were up 3.2%, of which 1.9% came from the opening of new space, helped by the earlier launch of its summer "New-In" brochure, which coincided with warmer weather. Next said the increase was slightly ahead of the guidance it provided in March for the first half of the year, which was flat to 3% growth.
Retail sales edged up 0.5%, while directory sales increased 9.2%, with full price sales rising 7%.
Bernstein analyst Jamie Merriman said the results were slightly ahead of expectations, though some of the growth was driven by higher promotional levels and one-offs.
"Given the somewhat challenging conditions in Q1, we are not surprised that management has not changed guidance despite the top-line beat; however, we expect performance to improve in H2, which is when we expect an increase to guidance is also more likely," he noted.
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