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Next Shares Rise as Overseas Online Sales Surge

Next's shares closed higher today after its third-quarter trading statement showed full-price sales growing faster than the retailer's own guidance. Overseas online sales drove the growth, while UK trading stayed muted.

Next (LON: NXT) shares closed up 2.47% today, after the retailer’s third-quarter trading statement showed sales growing faster than its own guidance. A trading statement is a quarterly sales update rather than full results, and this one pointed to overseas online sales as the engine.

The shares ended at 15,990p, against 15,605p yesterday. They ranged from 15,430p to 16,110p during the session and traded above the previous 52-week high of 15,900p set on the 5th of August, though the close finished below the day’s high.

The statement came at 7am. Full-price sales, which are sales before markdowns, rose 8.1% in the third quarter, against Next’s guidance of 5.8% growth for the second half.

NXT.LSE
Line chart of Next's share price over the past year with the previous 52-week high of 15,900p marked
Next’s share price over the past year, against its previous 52-week high of 15,900p.

Next also raised its full-year full-price sales guidance to growth of 7.3%, from 6.7%. Profit before tax guidance was left unchanged at £1.255bn.

International online sales did the work, up 32.2% against a forecast of 20.5% from broker Panmure Liberum, which says that gap accounts for the whole beat. UK sales rose 2.0%, in line with guidance, while stores fell 1.7%, reflecting a warm September.

Panmure Liberum puts the extra profit from stronger international trading at about £5m, offset by EU tariff costs. Marketing spend rose 67% year on year. UK holiday sales are expected to be muted.

Jefferies, which rates Next a hold, said:

Once again, Next’s Q3 shows a business amply able to offset near-term UK pressures with abundant international growth.

Jefferies

Jefferies’ target is 15,800p. Panmure Liberum rates Next a buy with a target of 16,000p.

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