Next PLC (LSE:NXT) shares jumped to a new all-time high after full-year profit guidance was upgraded after third-quarter sales came in stronger than expected, as the UK slowed down less than predicted.
The FTSE 100 clothing retailer also said that it intends to return surplus cash to shareholders via a special dividend at the end of January, currently calculated at around 310p per share, on top of an 87p interim dividend.
For the 13 weeks to 25 October, full-price sales increased 10.5% compared to last year, which it said was ahead of the 4.5% growth that it had previously forecast.
Sales in the UK increased 5.4%, outperforming guidance of 1.9%, even though growth slowed down from the "exceptional" conditions in the first half.
“In hindsight, we think we underestimated the positive effect of improved stock levels this year,” the company said.
Overseas sales jumped 38.8%, well ahead of the 19.4% growth expected, which was attributed to higher digital marketing spending and improved product availability in Europe.
The company said it now expects full price sales in the fourth quarter to rise 7.0%, up from its previous estimate of 4.5%. This revision adds £36 million to forecast sales for the period.
As a result, Next increased its full-year profit before tax guidance by £30 million to £1.135 billion.
The shares rose 7% to above £14.40 for the first time, up 14% in the past month and 45% since the start of the year.
Analysts at Deutsche Bank said it was "another sales beat and guidance raise", and that its previous cautious view on the UK outlook "was understandable but has not materialised (yet) and spending on marketing within the international business has delivered better returns than expected"..
** UPDATE: Adds share price, analyst comment **