An otherwise quiet morning saw high street staple Next dominate the headlines, the retailer dishing out a substantial half year breakdown.
Thanks to a far better than forecast, heatwave-helped first half, with total brand sales rising 3.9% following the usual Retail decline (the division’s sales slipped 6.9%) and Online surge (up 16.8%), Next managed to eke out a 0.5% increase in pre-tax profit to £311.1 million, reversing last year’s downward trajectory.
Now, it wouldn’t be a Next update with some watchful words from Lord Wolfson, and the CEO didn’t disappoint here. The firm highlighted queues and delays at ports as perhaps the biggest Brexit threat to UK business, while stating that its first half performance was ‘flattered’ by the unusually warm weather, meaning the company is still ‘cautious’ in the outlook for the rest of its 2018.
However, that didn’t stop the retailer from boosting its guidance. Next is now expecting its total full price sales to rise 3%, against the previously forecast 2.2% increase, with pre-tax profit estimated to nudge up by 0.1%, rather than plunge 1.3%. It was this, rather than the various warnings sprinkled throughout the update, that investors chose to focus on, sending the stock more than 8% higher to nearly £55.50.
Elsewhere there wasn’t a lot going on. The FTSE started the session flat just above 7460, unable to do anything with an oil sector celebrating Brent Crude’s journey to $81.50 per barrel. The DAX was just as uninteresting, the German index floating around 12350, but with the CAC mounting a charge back towards 5500 after climbing 0.4%.
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