Next posts 30% profits rise
British clothing group Next today brushed aside fears of a slowdown in high street spending after beating market expectations with a 30% hike in profits.
The Leicester-based group said a bumper pre-sale period at its 371 outlets had reduced the number of items being cleared at mark-down prices.
This boosted margins and enabled profits for the six months to July 31 to climb to £162.7m (€238.6m) – higher than the £137m (€201m) forecast by City analysts.
The improvement also reflected the benefits of moving to larger stores and a higher-than-expected increase in sales at its Next Directory catalogue operations.
Finance director David Keens warned that conditions may become tougher over the next six months, but the group remained confident of further progress.
Recent retail surveys have pointed to falling consumer confidence due to five interest rate rises since November and highlighted the impact of poor weather on sales.
Mr Keens said: “We haven’t noticed a discernible impact on the consumer yet.”
Next, which employs 40,000 people, said turnover from its high street stores, overseas franchises and catalogue operations rose 30% to £1.29bn (€1.89bn).
Recent trading remained strong, with like-for-like sales at its 323 stores open for at least a year up by 2.1% in the six weeks since August 1.
Stripping out the impact of new space on 37 existing outlets, Next said the improvement in same-store sales was even higher at 4.5% during these weeks.
