Shares of Next Plc (LON:NXT) fell more than 5% on Thursday, weighed down by muted full-year growth guidance and softer retail sales, even after the company reported first-half results slightly above expectations.
The Leicester-headquartered company said first-half net sales reached £3.2 billion, surpassing Visible Alpha consensus of £3.1 billion.
Full-price sales rose 10.9% year-on-year, while retail sales increased 5.4% and online sales posted gains of 9.2% in the U.K. and 28.1% internationally. Finance interest income grew 0.5% from a year earlier.
Adjusted profit before tax (PBT) for H1 came to £515 million, above the £510 million consensus. Adjusted basic earnings per share were 330.2p, compared with an expected 324p.
By segment, retail sales were £899 million, slightly below the £917 million consensus, with earnings before interest and taxes (EBIT) of £97 million versus a consensus of £113 million. Online international sales reached £612 million, above the £579 million forecast, with EBIT of £93 million versus 90 million expected.
Online U.K. sales totaled £1.3 billion, exceeding the £1.2 billion estimate, generating EBIT of £230 million, above £218 million consensus.
Finance interest income was £151 million in line with expectations, with EBIT of £101 million versus £86 million anticipated.
Net debt excluding leases stood at £538 million, below the £664 million forecast, with NEXT guiding to year-end net debt of about £720 million.
For the second half, NEXT maintained guidance for full-price sales growth of 4.5% year-on-year, compared with consensus of 5.3%.
U.K. retail and online sales are projected to rise 1.9%, below RBC’s estimate of 3.3%, while international online sales are expected to increase 19.4%, slightly below the 21.4% consensus.
Finance interest income is expected to decline 0.5% year-on-year, versus a 0.9% rise in consensus.
The British retailer reiterated full-year adjusted PBT guidance of £1.11 billion, in line with the consensus of £1.10 billion, and post-tax EPS guidance of 714.1p compared with 712p expected.
RBC Capital Markets noted that “H2 full price sales growth guidance of +4.5% yoy looks undemanding, especially compared with the +10.9% yoy that NEXT has delivered in H1,” while flagging Next’s strong omnichannel and international performance.
The brokerage also pointed to the company’s “broad range of brands and strong omnichannel offer, with fast, highly automated logistics and a well-developed customer base” as ongoing strengths.
Next has developed a growing international presence, representing roughly 20% of sales, driven by womenswear and menswear and targeted marketing in Europe, the Middle East, and other markets.
Source :
https://www.investing.com/news/earnings/next-profit-jumps-14-on-online-boom-keeps-111-bln-outlook-steady-4243829
