Next eyes strong end to 2013-14 amid robust Q3 revenue

21 Nov '13

2 min read

A bigger than expected rise in third quarter sales revenue has prompted Britain’s second largest clothing retailer, Next to raise its full-year profit guidance as a recovering economy pushes up consumer spending.

Sales of the Next Brand rose 4.3 per cent in the third quarter ended October 26, 2013 even as it underlined volatility in trading throughout the period.

Next, which has more than 500 stores in Britain and Ireland, had posted a sales growth of 2.3 per cent in the first half of 2013-14 while last quarter’s sales growth also surpassed the company’s guidance of 1 - 4 per cent for the second half of its current financial year.

The clothing retailer expects to earn a pre-tax profit of 650 to 680 million pounds in the full-year ended January 2014, up from a previous guidance of 635 to 675 million pounds.

Strong online offerings, new store openings and robust expansion in overseas markets have helped Next tide over challenging macro-economic conditions.

Next will benefit from the improving outlook for consumer spending in the UK but the pace of spending may be limited as inflation outpaces wage rises.

The company has raised its estimate for 2013-14 sales revenue growth to 2-3.75 per cent from 1.5-3.5 per cent forecasted earlier.

Next expects a 15-21 per cent growth in its earnings per share in 2013-14, up from a previous guidance of 12 -19 per cent. The company expects its EPS to be enhanced by share buybacks of at least 300 million pounds.

With the holiday shopping season round the corner, Next will be banking on its heavy advertising campaign for its all new winter collection to deliver a sales boost. The company has roped in supermodel Kendra Spears for showcasing its new collection.

Fibre2fashion News Desk - India

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