UK DIY News
Next Reports 'Better Than Expected' Pre-Christmas Performance
Next PLC has reported on Christmas trading for the period ended 3 January 2020.
SUMMARY
· Q4 full price sales1 to 28 December up +5.2%, which was +1.1% ahead of our internal forecast |
· Year to date, full price sales up +3.9% on last year |
· Full year profit guidance increased by £2m to £727m2. This would represent an increase of +0.6% on last year and Earnings Per Share (EPS) growth of +5.4% |
· Looking ahead, initial guidance for the year ending January 2021 is for full price sales to be up +3.0%, profit up +1.0%, EPS growth of +3.5% |
SALES TO 28 DECEMBER 2019
The table below sets out the full price sales performance by division for both the Christmas trading period (27 October to 28 December) and the year to date (27 January to 28 December). Full price sales in the Christmas trading period were +1.1% (£9m) better than our internal forecast. We believe our sales performance in the period was helped by a much colder November than last year and improved stock availability in both our Retail stores and Online.
Full price sales (VAT exclusive) | 27 Oct to 28 Dec | Year to 28 Dec |
Retail | - 3.9% | - 4.6% |
Online | +15.3% | +12.1% |
Product full price sales | +5.3% | +3.6% |
Finance interest income | +3.4% | +7.8% |
Total full price sales including interest income | +5.2% | +3.9% |
End-of-Season Sale
Stock in our end-of-season Sale (including the stock we put into our Black Friday event) was down -2.9% on last year and Clearance rates to date have been slightly lower than our expectations.
FULL PRICE SALES AND PROFIT GUIDANCE FOR THE CURRENT YEAR
For the full year we expect full price sales growth of +3.9%, +0.3% ahead of the guidance given in October. We have increased our profit guidance for the full year by £2m to reflect these additional sales. Central guidance for EPS is 458.7p, an increase of +5.4% on the previous year.
Full year estimate to January 2020 | New central guidance | Previous central guidance |
Total full price sales versus 2018/19 | +3.9% | +3.6% |
Group profit before tax | £727m | £725m |
Group profit before tax versus 2018/19 | +0.6% | +0.3% |
Earnings Per Share | 458.7p | 457.9p |
Earnings Per Share growth versus 2018/19 | +5.4% | +5.2% |
OUTLOOK FOR SALES, PROFIT, CASH FLOW AND EPS IN THE YEAR AHEAD
Sales and Profit Guidance for the Year Ahead
Our guidance for full price sales growth for the year ahead is +3.0%. At this level of sales growth, we anticipate Group profit would be £734m, up +1% on the current financial year. This guidance is based on a 52 week sales period. However, next year will be a 53 week year to 30 January 2021 and we expect the additional week of sales to generate approximately £13m of profit.
Our central guidance for sales, profits and EPS in the year ahead is set out in the table below. The EPS growth assumes that (1) we will be able to use all surplus cash to buy back shares at £71.76 and that (2) these will be purchased evenly throughout the year.
Full year estimate to January 2021 (52 week basis) | Central guidance |
Total full price sales versus 2019/20 | +3.0% |
Group profit before tax | £734m |
Group profit before tax versus 2019/20 | +1.0% |
Earnings Per Share growth versus 2019/20 | +3.5% |
We are scheduled to announce our results for the full year ending January 2020 on Thursday 19 March.
Source : Next PLC
Thank you for the excellent presentation that you gave at Woodbury Park on Thursday morning. It was very interesting and thought-provoking for our Retail members. The feedback has been excellent.