Next ups sales guidance

4th Nov 2009 07:01

Fashion chain Next has upped its guidance for second half sales up to Christmas Eve after reporting better than expected sales in the third quarter.Retail like-for-like sales dropped 1.3% in the three month ended 31 October, while directory sales were up 5.1%, with both Next Retail and Next Directory performing ahead of the second half guidance the group gave in September. For the second half of the year, Next upped its like-for-like sales forecast to 0% to -3% compared with previous expectations of -3.5% to -6.5%. Directory sales are now seen growing between 4% and 6%, better than September forecasts of 0% to 2%.The market consensus for full year pre-tax profits is currently around £442m. If it is assumed that the revised sales guidance given above is achieved, then the group would anticipate market consensus increasing by around £30m to circa £472m. This would represent an increase of 10% over last year's profit.The group said there was a noticeable pick-up in sales in October as it came up against the weak comparatives of the previous year.Operating costs remain well controlled and, as indicated in September, gross margin erosion from the devaluation of Sterling has been less damaging than initially feared, Next added. This has been as a result of us negotiating significant reductions in Dollar and Euro input cost prices.