Wednesday, March 19, 2008; Posted: 04:05 AM
The Leicester-based group flagged in a Jan 3 2008 trading statement that it will report a year to Jan 26 pretax profit of 492-502 mln stg, up from 478 mln stg in the previous year.
It forecast an operating profit up 4-6 pct on the previous year's 507.5 mln stg and earnings per share up 14-17 pct on the previous year's 146.1 pence, the higher EPS forecast reflecting share buybacks and a lower tax rate.
However, it also said it was "extremely cautious" about the new year and did not expect the retail chain to return to underlying sales growth in 2008. In September the group had said it was hopeful of going back into positive territory this year.
The group's Jan 3 statement revealed combined sales of Next Retail and Next Directory for the 21 weeks to Dec 24 2007 increased 0.3 pct compared to the same period last year.
Next Retail sales were down 0.3 pct in the period, with mainline like-for-like sales in the 309 stores unaffected by new openings down 3.2 pct. Next Directory sales were up 2.2 pct.
On prospects for 2008 analysts are divided.
"The early timing of Mothers' Day (March 2) will have helped sales, but we expect the news to be grim and we see big cuts to consensus forecasts," analysts at Panmure Gordon told clients in a 'sell' note.
"The crux of the issue is a poor offer (except in childrenswear). It has lost its sparkle and its previous knack of putting a twist on current trends. This leaves its womenswear ranges looking expensive and predictable."
Analysts at UBS, Next's house broker, are, not surprisingly, more bullish, rating the stock a 'buy'. Although they expect retail like-for-like sales to fall 3 pct in the current year they note that the group's defensive qualities have been proved time and again.
Nick Bubb, analyst at Pali International, is also a buyer. He trusts the management, led by chief executive Simon Wolfson, to deliver and thinks, with its share price depressed, the company may get taken over. Last month analysts at Credit Suisse suggested Marks & Spencer Group PLC should takeover Next. james.davey@thomson.com jdd/lht
COPYRIGHT
Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
MMMM
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
    |
   |
