Next
Next maintains profit guidance, shares rally
FTSE 100 retailer, Next plc, announced like for like sales at the bottom end of market expectations, but shares in the company jumped over 8% in early trading after it said it still expected to hit its previous guidance on an earnings per share basis.
Next Retail and Next Directory reported a combined drop in sales of 1.9% for the 29 July to 24 December 2008 period. As expected, the drop in sales was far more severe over the holiday period, with the group's 347 stores reporting a 7% drop in like for like sales. This was at the bottom end of guidance given in September of -4% to -7%.
However, despite the drop in like for like sales, Next reiterated that it would still meet the current market consensus of profits between $415 - £435 million and earnings per share between 152 and 160 pence. This was enough to boost sentiment towards the company, as it was feared by many that it may post much worse sales figures for the full year, and even reduce its guidance for the full year results.
Looking ahead to 2009, the company said it was "budgeting very conservatively", and that it was anticipating continued weak demand for all of 2009. Next also warned that it was expecting further margin pressure in the Autumn Winter - primarily due to weaker Sterling.
Net debt at financial year end it expected to be around £670 million, covered 12 times by earnings before interest, tax, depreciation and amortisation (EBITDA). Preliminary results for the 52 weeks to 24 January 2009 are expected to be released on 26 March 2009.
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