Economy UK’s Next maintains guidance after navigating tough trading

UK’s Next maintains guidance after navigating tough trading

Image result for UK's Next maintains guidance after navigating tough trading
UK’s Next maintains guidance after navigating tough trading

British clothing retailer Next on Wednesday maintained its profit guidance for the full-year after it navigated the difficult autumn trading environment that has hurt its rivals.

Recent industry updates have indicated a poor start to Britain’s autumn/winter fashion season, given an unseasonably warm September and October and a tough economic backdrop with consumers’ budgets under pressure.

Next which raised its sales and profit guidance last month, said full-price sales including interest income rose 2.0 percent in the 13 weeks to Oct. 27, having risen 2.8 percent in the previous quarter.

The retailer, which trades from over 500 stores in Britain and Ireland, about 200 stores in 40 countries overseas and its Directory online and catalog business, said that outcome was in line with its expectations.

Full price sales at Next’s stores fell 8 percent but were up 12.7 percent at its online business, continuing well established trends.

Superdry warned on profit earlier this month, highlighting weak sales of jackets and sweatshirts, while department store chain John Lewis has reported lackluster trading for its second half so far.

Online fashion has been the exception with both ASOS and Boohoo recently reporting strong sales growth. Marks & Spencer, Britain’s biggest clothing retailer, will update on trading next Wednesday.

An industry survey published on Tuesday showed overall retail sales growth had slowed more than expected this month.

For the full 2018-19 year Next forecast full price sales growth of 3 percent and pretax profit of 727 million pounds ($924.2 million) versus 726.1 million pounds in 2017-18, keeping the guidance it issued in September.

Shares in Next, up 18.4 percent so far this year, closed Tuesday at 5,306 pence, valuing the business at 7.46 billion pounds.

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