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Next reports better than expected sales for first quarter, but remains cautious
Clothing retailer, Next plc (LSE: NXT) slipped 2% in early deals after the company released a trading update for the 14 weeks to 2 May 2009. Results were far better than expected, with like for like sales at Next Retail slipping only 2.3% against an expectation of a 6-9% fall. The FTSE 100 retailer was quick to play down the figures, citing a late Easter, warm weather and the weakness of sterling keeping people in the UK as reasons for the better than forecast figures.
Taking into account the better than expected first quarter, Next said it was now forecasting that like for like sales at Next Retail will fall between 4 and 7%.
“We expect the second quarter will be weaker than the first as comparative figures are more challenging. Last year the second quarter was much better than the first. We are now forecasting that Next Retail like for like sales in the first half will be within the range of -4% to -7% and that Next Directory sales will be broadly flat,” the company stated.
“As a result of the better than expected sales to date we have added £15m to our internal profit forecasts. However, these improvements could yet be offset by the effects of pandemic flu, although at this stage it is hard to predict the impact on consumer behaviour. “
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