Next cautious on 2012 -UPDATE

4th Jan 2012 07:41

Fashion chain Next said the strong performance of its Directory unit continues to compensate for the slightly disappointing trading at its Retail stores.Interestingly the firm says its post-Christmas sale period has gone well with final clearance rates slightly ahead of 2010. This will give investors some heart about the retailing sector.However, Next also makes clear that "despite a good final week before Christmas, November and December sales were disappointing".The Retail unit saw sales (excluding VAT) fall 2.7% in the period from August 1st to December 24th versus the corresponding period the year before, while Directory sales improved by 16.9%. Sales for the Next brand overall rose 3.1%, in line with the full year guidance range given in November of between 2.5% and 4.0%. Next expects its full year profit before tax figure to come in "£7m either side of £565m", representing an increase of 4% on the prior year and an earnings per share increase of 11.3% after buy backs.In 2012 Next is cautious, saying it expects "profit before tax only slightly up on this year". The group expects to make £200m in surplus cash which will be returned to shareholders through share buy backs.Full year results will be released on March 22nd.Commenting on the company´s trading statement analysts at Credit Suisse are saying that, "The trading and profit performance is mixed but reassures on some elements of the Next business proposition - management strength, attractions of its multi-channel model and balance sheet. However, we believe the outlook comments for 2012 will be taken as subdued and likely to lead to c3% reductions to 2012/13 consensus PBT forecasts. We believe that the comments should be seen within the framework of a traditionally conservative management team and that Next is guiding to a further c£200m of surplus cash for share buybacks through 2012." BS