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Fashion retailer Next has recovered from its “most challenging year” reporting a Q1 sales increase of 6% compared with last year.
Next said that the results were better than expected and around £40m ahead of its internal forecast, boosted in recent weeks by unusually warm weather.
The company’s online sales were particularly strong and up 18.1%, driven by the growth of its Next-branded stock and third party brands on its UK platform.
Consequently Next has upgraded its full-year forecasts predicting a 2.2% sales increase for the full fiscal year to 29 January 2019.
It has also predicted an increase in full-year pre-tax profits from £705m to £717m.
In the trading update Next said of its predictions: “At our results presentation in March we set out our guidance for the full year. At that time, we anticipated that the sales performance in the first quarter would be flattered by the underperformance of our ranges in the same period last year, so we did not expect sales for the rest of the year to be as strong as the first quarter. We still believe this will be the case.
“At first sight, the estimate for the rest of the year looks overly conservative. However, when compared to two years ago, our forecast looks more realistic.”
Next also anticipates that its earnings per share (EPS) will be enhanced by 4.7% as a result of share buybacks. This combined with a slightly lower tax rate means that it expect EPS to move forward faster than profits. At its central guidance Next expects EPS to increase by 3.7% for the year.
