Next upgrades profit forecast on Christmas sales beat​

British clothing retailer Next (NXT.L) upgraded its full-year profit forecast after it beat guidance for sales in the run-up to Christmas, as colder weather helped sales of winter clothes.
FILE PHOTO: Mannequins are pictured in the window of a Next clothing store in London March 26, 2009. REUTERS/Luke MacGregor
Next, the first major listed retailer to update on Christmas trading, did, however, caution on Wednesday that many of the challenges it faced in 2017 look set to continue in 2018.
It said subdued UK consumer demand driven by a decline in real income, the increase in spending on leisure at the expense of clothing, and inflation in cost prices all remain difficult.
Next, which trades from more than 500 stores in the UK and Ireland and the Directory internet and home shopping business, has been Britain’s most successful clothing retailer this century in terms of profits but has faltered over the last two years due to a shift in spending away from clothing towards holidays and entertainment.
Its shares have fallen 7 percent over the last year.
Next said total full price sales rose 1.5 percent in the period from Nov. 1 to Dec. 24 percent, the bulk of its fourth quarter.
That was ahead of company guidance for a fall of 0.3 percent and follows third quarter growth of 1.3 percent.
Next had flagged that comparative sales numbers with last year were much more demanding in the fourth quarter than they were in the third.
The retailer upgraded its central pretax profit guidance for the full 2017-18 year, forecasting 725 million pounds, up from previous guidance of 717 million pounds but below the 790.2 million pounds made in 2016-17.
Next forecast full price sales growth of about 1 percent in the 2018-19 year and another fall in profit to 705 million pounds, with costs growing faster than sales.