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Online sales drive rise in Next interim profits

By Frank Prenesti

Date: Thursday 19 Sep 2019

(Sharecast News) - High Street fashion chain Next said interim profits rose 2.7%, as strong online sales offset a fall in retail and the company maintained its outlook for the full year.
Pre-tax profits increased to £319.6m from £311.1m a year earlier. Online sales jumped 12.6% to £1bn as customers preferred to shop from home. Retail sales reflected the growing decline in customers visiting stores, falling 5.5% to £874m.

Total group sales rose 3.7% to £2.05bn. The company said it still expected full year pre-tax profits to rise 0.3% to £725m, with full-price sales up 3.6% and a 5.2% increase in earnings per share growth.

Markets.com chief analyst Neil Wilson said Next was " just better at doing multichannel" in delivering a "compelling offering for customers despite some doom and gloom in retail".

"As we always like to point out, there are always winners and losers in retail - it's never just about the consumer sentiment being weaker or stronger," he said.

"Such was the outperformance in the first half management raised full year full price sales guidance from +1.7% to +3.6%. This equates to an extra £70m in sales this year than forecast in May. That adds £20m in profit, but lower clearance sales will cost £10m. Therefore, full year profit guidance increased by £10m to £725m. Importantly this means annual profit growth again at Next. It's small at just +0.3%, but it's a whole lot better than the May forecast of -1.1%."

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