Happy Next beats guidance again in Q1

Can Next do no wrong? Well, it’s got it wrong at times in the past but in recent years it’s been on a roll and this doesn’t seem to have changed in the latest quarter, despite the undeniably tough backdrop in its core UK market.

The fashion-to-home-to-beauty retailer said on Wednesday that in the 13 weeks to 27 April, Next Trading full-price sales were up 5.7% versus last year, slightly ahead of its guidance.

And despite having just beaten what’s usually extremely cautious guidance from the firm, it’s maintaining its sales and profits forecast for the full year with group profit before tax to be up around 4.6% at £960 million.

The sales increase for Q1 divided down as an 8.8% rise in its Online division, flat sales in its physical Retail operation and Finance interest income rising 6.4%.

As mentioned, it’s maintaining guidance for Next Trading full-price sales to be up 2.5% at £4.9 billion but total group sales to be up 6% at £6.2 billion. The difference is the result of the acquisition of equity stakes in FatFace and Reiss. 

And while sales in Q1 rose by that fairly healthy 5.7%, the company’s estimate for Q2 is that they will dip by 0.3%, with rises in both Q3 and Q4 of just 2.5%. Of course, given the tendency to issue cautious guidance, investors in the business will be hoping that those numbers for the rest of the year will be beaten just as the Q1 estimate was.

But we won’t know whether that hope becomes a reality until August when the company issues its update for the first 26 weeks of the year to the end of July.