Web sales help Next weather storm

NextHigh street retailer Next continues to be propped up by a strong performance at its online business as the tough consumer climate weighs on its stores.

The fashion and homewares chain, which has 536 stores, saw total sales rise 1.4% in the 13 weeks to April 28 as outlet sales fell 3.9% and online Next Directory rose 11.8%.
However, the FTSE 100-listed group said the quarter was up against tough comparatives last year, when the Royal Wedding and warm weather boosted sales.

Next, which has seen its share price rise 34% in the last year, held its full-year expectations for pre-tax profit of between £560 million to £610 million, compared to last year's £570 million.

Fashion retailers were given a boost in March as the unseasonably hot weather prompted people who are hesitant to part with their cash to buy summer ranges.

However, while Next did not provide a like-for-like sales figure, analysts at broker Investec estimate its stores must have suffered an 8% decline in the period.

But Bethany Hocking, Investec analyst, maintained a "buy" recommendation on the retailer's stock, highlighting its proven strategy and strong management team, as well as consistent financial performance, multi-channel offering and international prospects.

Next said product costs, profit margins and selling prices saw "little change" in the first quarter and it expects this to continue into the second quarter.

The group said it remained confident that total sales in the first half of the year will be between 1% and 4% higher than the previous year.

Shares gained an additional 2% in value on Wednesday.
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