Next Shares Rise as Q1 ‘Better-Than-Expected’

Next (LON: NXT) shares rose around 1.75% on Thursday after the retailer reported stronger-than-expected first-quarter results, driven by warm weather and robust in-store demand.

In the 13 weeks to 26 April, the company said full price sales rose 11.4% year-on-year, £55 million ahead of company forecasts. 

The increase was attributed largely to warmer weather boosting demand for summer-weight clothing. 

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However, the company cautioned that some of these sales may have been pulled forward from the second quarter, and therefore, it held its Q2 and full-year sales guidance steady.

Accounting for the sales uplift, Next raised its full-year profit before tax guidance by £14 million to £1.08 billion, up 6.8% on last year. 

The group’s revised forecast puts full price sales at £5.4 billion, representing 6% growth.

“Sales in our Retail shops have been much stronger than we expected but, in our experience, shops benefit disproportionately from the favourable weather,” the company said in a statement.

Online international sales led performance, up 29.6%, while total product full price sales climbed 12.1%.

Despite the upbeat quarter, Next remains cautious about the second half due to tougher comparisons and the expected economic impact of National Insurance increases. 

The company also noted it may return surplus cash to shareholders via a special dividend if share buybacks do not meet return thresholds.