Next firing on all cylinders in Q3

Next has delivered a strong set of figures for the third quarter with both its Next Directory and stores businesses performing better than the market had expected.

Retail like-for-like sales fell by 1.3 per cent compared with an expected decline of three per cent and its Directory business delivered a sales increase of 5.1 per cent. This strong performance has led to forecast upgrades from the City.

The company stated that there had been a noticeable pick-up in sales during October as the business came up against weak comparatives from the previous year. It also believes its ranges have been improved, particularly womenswear.

Capping off the decent set of Q3 numbers, Next indicated that operating costs remain well controlled and that gross margin erosion from the devaluation of Sterling has been less damaging than initially feared.

The response from the City is an increase in consensus pre-tax profit forecasts for the current year of around seven per cent to £472 million compared with the previous £442 million and a strong immediate uplift in Next shares by five per cent to 1,891 in early trading.