Regulatory News
REG-Next PLC Interim Management StatementReleased: 04/11/2009
http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20091104:RnsD9042B
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RNS Number : 9042B
Next PLC
04 November 2009
Date: Embargoed until 07.00hrs, Wednesday 4 November 2009
Contacts: Simon Wolfson, Chief Executive
David Keens, Group Finance Director
NEXT PLC
Tel: 0844 844 8888
Alistair Mackinnon-Musson
Nathan Field
Hudson Sandler
Tel: 020 7796 4133
Email:next@hspr.com
Photographs: Photographs available at: http://www.next.co.uk/press/corporate.asp
Next Plc
Interim Management Statement
Sales Performance and Outlook
Sales in the third quarter to 31 October 2009 have been better than we expected,
with both Next Retail and Next Directory performing ahead of the second half
guidance we gave in September.
The consumer environment remains subdued, but has been more benign than we
anticipated. Inflation and mortgage rates remain encouragingly low and the fall
in employment has been contained to around 2%. Our customers continue to manage
their credit carefully and we have now begun to see a year on year reduction in
the number of customers going into arrears on their Next Directory accounts. We
believe this is a reflection of a general improvement in consumer finances.
There was a noticeable pick-up in sales in October as we came up against the
weak comparatives of the previous year: it was at this time last year that the
publicity around the credit crisis and the demise of Lehman Brothers reached its
height. We also feel that our ranges have improved, particularly Womenswear, as
a result of increased newness and the early adoption of new trends.
In Directory, the strong performance of our Homeware ranges and better stock
availability generally have both contributed to the sales improvement.
The table below sets out our third quarter performance, the second half guidance
given in September and revised upward guidance for cumulative second half sales
up to Christmas Eve.
Q3 Performance September H2 Revised H2
Guidance Xmas Guidance
Total Brand sales +3.1%
Total Retail sales +2.2%
Retail like-for-like sales -1.3% -3.5% to -6.5% 0% to -3%
Directory sales +5.1% 0% to +2% +4% to +6%
Outlook for Costs and Profits
Operating costs remain well controlled and, as indicated in September, gross
margin erosion from the devaluation of Sterling has been less damaging than we
initially feared. This has been as a result of us negotiating significant
reductions in Dollar and Euro input cost prices. The market consensus for full
year Profit Before Tax is currently around £442m. If it is assumed that the
revised sales guidance given above is achieved, then we would anticipate market
consensus increasing by around £30m to circa £472m. This would represent an
increase of 10% over last year's profit.
Christmas Trading Statement
We intend to issue a sales update for the period to 24 December 2009 on or
around Wednesday 6 January 2010.
- Ends -
Note for Analysts/Editors on Comparative Like-for-Like Sales Calculations
Internet (direct) trading now accounts for a meaningful percentage of many
retailers' total sales. As a result, comparing LFL sales between different
companies can be problematic. Some retailers include direct sales in their
like-for-likes, others (including Next) do not. If Next were to include all
direct sales (this year and last year) in its retail like-for-like sales
calculation, then it would improve the reported performance by 2.2% and take the
third quarter to a positive like-for-like figure of +0.9%.
There is, of course, no right answer as to whether direct sales should be
included in retail like-for-likes or not. Our preference is to continue not to
include them, as we believe trends in the performance of same-stores (unaffected
by new openings) are useful in analysing underlying retail performance and
profitability. Going forward we will give the figure inclusive of direct sales
as a footnote for comparative purpose.
This information is provided by RNS
The company news service from the London Stock Exchange
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