Next says August, September sales disappointing
LONDON (Reuters) - British clothing retailer Next said sales in August and early September had been disappointing during what had been an unusually quiet period, after it posted a 10.2 percent rise in first half profit.
"We remain cautious about the economic outlook whilst maintaining full year guidance that our sales, profits and earnings per share will all move forward on last year," the firm said on Thursday.
Next, which trades from over 500 stores in the UK and Ireland, nearly 200 stores in over 30 countries overseas, and the Next Directory online and catalogue business, made a pretax profit of 251 million pounds in the six months to July 28.
That compares with analyst forecasts of 234-254 million pounds and reflected a 4.8 percent rise in revenue to 1.64 billion pounds.
Earnings per share rose 18.7 percent to 118.5 pence, boosted by share buybacks of 112 million pounds and lower tax rates, while the interim dividend was raised 12.7 percent to 31 pence.
Last month Next raised its guidance for 2012-13 pretax profit to 575-620 million pounds, equating to growth of 0.8-8.7 percent on 2011-12.
It forecast total sales growth in 2012-13 of 2-4.5 percent and said it expected EPS to grow 6 percent more than the growth in pretax profit.
Many British retailers are finding the going tough as consumers hold back spending in the face of inflation, meagre wage increases, employment fears and government austerity measures.
Last week an industry survey said underlying UK sales fell in August as the London Olympics failed to provide the hoped for boost to demand.
Next, the official clothing and homeware supplier to the Games, has generally defied the gloom, helped by its strong online offer, a constant stream of new store openings and diversification into homewares and overseas.
Shares in Next, which have risen by over a half over the last year, closed Wednesday at 3,560 pence, valuing the business at 5.87 billion pounds.
(Reporting by James Davey)
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