You’d be forgiven for thinking Next was Gap (NYSE:GPS) after looking at its 2017 chart. The company saw huge shifts following nearly every update across the year, with those 12 months encompassing lows of £35.70 in July and £53-plus 13 month highs in October. By the end it closed 2017 at £45.26, marking an 8% decline.
So far 2018 has been a lot less wild. Following the immediate jump the stock saw at the start of 2018, Next has ranged between £47.50 and £52.50, twice hitting that latter price – at the ends of January and April respectively – before pulling back. Next now sits at a current trading price of £41.42.
In amidst all this came Next’s annual results in late March, a period that Lord Wolfson labelled as ‘in many ways’ the ‘most challenging year’ the company had faced for a quarter of a decade. Interestingly, while the company pointed to a ‘weak clothing market’, it also admitted it suffered from ‘self-inflicted product ranging errors and omissions’.
Pre-tax profits plunged 8.1% to £726.1 million, while total sales slipped 0.5% to £4.12 billion. As ever there was a stark split between the firm’s Retail and Online offerings; the former dropped 7.9%, a decline that’s as painful as the latter’s 9.2% increase is impressive.
In terms of Thursday’s first quarter update, following some promising data from Kantar Worldpanel, analysts at JPMorgan (NYSE:JPM) are expecting Next Brand sales to rise 3% year-on-year. The company itself has been keen to downplay the value of any like-for-like sales rise, however, by highlighting the weak comparatives of Q1 2017. There’s also the impact of the first quarter’s bad weather, with next forced to temporarily close 60 stores due to bad weather in February.
Next PLC(LON:NXT) (LON:NXT) has a consensus rating of ‘Hold’ alongside an average target price of £45.82.
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