NEXT PLC Share Price Rallied 5.84% on the Latest Trading Update

The NEXT plc (LON: NXT) share price rallied 5.84% after releasing its latest trading update. The British multinational clothing, footwear and home products retailer noted that full-price sales over the nine weeks ending on 30 December 2023 recorded a 5.7% increase. The full-price sales were much higher than the company’s expected growth of 2.0%.

Consequently, the company has raised its profit before-tax forecast for the entire year by £20 million to £905 million, a 4.0% increase from the previous year. The increase includes £17 million from exceeding its sales expectations to date and an additional £3 million from revised predictions for full-price sales in January.

It's important to note that full-price sales exclude VAT and encompass only the items sold at full price in Retail and Online, plus interest income from NEXT Finance. Sales during Sale events, Clearance operations, or via Total Platform are not included. These figures represent non-statutory sales.

Looking ahead to the following year, the company anticipates a 2.5% increase in full-price sales for its ongoing business. Considering recent business acquisitions, it projects an overall 6.0% increase in Group sales, which includes subsidiary companies. 

NEXT plc also forecasts a 5.0% increase in Group profit before tax for the upcoming year. For clarity, the term ‘subsidiaries' in the Trading Statement refers to all equity investments, including those not fully controlled by the company, such as JoJo Maman Bébé.

The company further broke down its impressive results, revealing that online sales in the fourth quarter to 30 December 2023 were up 9.1% and 7.7% in the second half to December. The full-price sales in the retail segment were up 0.6% in Q4, leading to a combined total full-price sales of 5.6% in Q4. 

NEXT plc also revealed that it had controlled its stock levels quite well and entered the end-of-season sale with stock levels down 12% compared to a similar period last year. 

The company’s updated forecast for the current fiscal year noted that the £20 million increase in projected profit was due to a £17 million boost from surpassing its sales target by £38 million. 

NEXT plc share price. 

The NEXT plc share price rallied 5.84% to trade at 8530.0p from Wednesday’s closing price of 8059.0p.