Bloomberg News

Next Reiterates Profit Target as Sales Fall on Weather

May 02, 2012

(Corrects company location in second paragraph.)

Next Plc (NXT), the U.K.’s second-largest clothing retailer, reiterated profit guidance after first- quarter sales slowed as wet weather curbed shopping and the year-earlier period included a boost from the royal wedding.

Retail store revenue fell 3.9 percent in the 13 weeks ended April 28, the Leicester, England-based retailer said in a statement today. That compares with the median estimate for a 3.6 percent decline from six analysts surveyed by Bloomberg and was worse than the 2.7 percent drop reported for Aug. 1 to Dec. 24.

Chief Executive Officer Simon Wolfson said in March there was “significant downside risk” to U.K. consumer confidence from faltering employment, tight credit availability and the European debt crisis. The retailer said product costs, selling prices and profitability were little changed in the period and it expects that to continue.

“April has seen particularly unfavorable weather,” and comparable figures from a year earlier “are extremely challenging,” Caroline Gulliver, an analyst at Execution Noble, said in a report before the release. She has a neutral recommendation on the shares.

A long holiday weekend for last year’s royal wedding and “exceptionally warm weather” boosted last year’s first-quarter sales, the retailer said today.

Next fell 1.1 percent to 2,896 pence in London trading yesterday. The stock has gained 5.8 percent this year.

Profit before tax for the year will be between 560 million pounds and 610 million pounds, the retailer forecast.

To contact the reporter on this story: Sarah Shannon in London at sshannon4@bloomberg.net.

To contact the editor responsible for this story: Sara Marley at smarley1@bloomberg.net


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