Next sales drop again as directory continues to outperform stores

Henrietta Strickland
August 3, 2017

Overall second-quarter sales rose 0.7%, beating expectations, after an 11.4% jump from its Directory catalogue and internet business.

In addition, full price sales in its face-to-face retail division fell by 7.4%, compared to an 8.1% decline in the three months to 29 April.

Sales at high street retailer Next continued to drop in the second quarter of 2017, despite an increase in June and July and an improvement in its online business.

As of 09:39 BST, Next's share price had jumped 6.94 percent to 4,298.00p, outperforming the broader United Kingdom market, with the benchmark FTSE 100 index now standing 0.28 percent in the red at 7,390.97 points.

Adjusting for this distortion, it said underlying total sales in the second quarter were down -1.6% and down -2.0% in the first half.

The company, however, cheered investors with a third special dividend of 45p per share, and said that it expected to generate £307 million of surplus cash for the year. "The leap in surplus cash has investors eyeing up more dividends".

It also said a spell of warm weather had helped sales.

Shares soared 10% higher in early trading on Thursday, but the retailer warned that it faced a "tough" environment with real-terms wage growth lagging behind inflation.

"While this update provides a welcome tonic to shareholders, it's clear Next is still feeling the heat".

He said even with the "solar-powered boost" to its second-quarter sales, the company was still expecting second half sales to fall.

As a result of this performance Next has slightly improved its full-year forecast by narrowing its sales guidance range for the full year to -3.0% to +0.5%.

Despite this, it left its profit guidance unchanged, after reducing it in January and May.

Other reports by Click Lancashire

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