Next PLC Trading Statement (2774H)
31 Julio 2019 - 1:01AM
UK Regulatory
TIDMNXT
RNS Number : 2774H
Next PLC
31 July 2019
Date: Embargoed until 07.00hrs, Wednesday 31 July 2019
Contacts: Amanda James, Group Finance Director (analyst calls)
NEXT PLC Tel: 0333 777 8888
Alistair Mackinnon-Musson Email: next@rowbellpr.com
Rowbell PR Tel: 020 7717 5239
Photographs: http://www.nextplc.co.uk/media/image-gallery/campaign-images
Next plc
Trading Statement - 31 July 2019
SUMMARY
-- Q2 full price sales up +4.0% on last year
-- Full year full price sales guidance increased from +1.7% to +3.6%
-- Full year profit guidance increased by GBP10m to GBP725m (+0.3% on last year)
-- Earnings Per Share guidance increased from +3.4% to +5.2% on last year
SALES FOR THE 26 WEEKS TO 27 JULY 2019
Full price sales in the first half were up +4.3% on last year.
Total sales, including markdown sales, were up +3.8%. The table
below sets out the full price sales growth by business divisions:
Retail stores, Online and Finance interest income, by quarter and
for the first half.
First Quarter Second Quarter First Half
Full price sales (VAT exclusive) to 27 April to 27 July to 27 July
================================================== ============== =============== ============
Retail - 3.6% - 4.2% - 3.9%
Online +11.8% +12.0% +11.9%
Product full price sales +4.0% +3.7% +3.8%
============== =============== ============
Finance interest income +11.4% +8.3% +9.9%
Total full price sales including interest income +4.5% +4.0% +4.3%
============== =============== ============
Second Quarter Analysis - 13 weeks to 27 July
Full price sales in the second quarter have been better than we
anticipated and were up +4.0% on last year. This was 4.5% better
than the guidance of -0.5% given in our May Trading Statement. A
closer examination of the quarter's performance by month (set out
in the chart below) shows that full price sales during May and June
combined were up +3.0%; July was particularly strong and up +6.8%
on last year. However, some of July's over-performance in full
price sales came as a result of lower markdown sales in our
end-of-season Sale. We believe that the sales performance in
May/June is a better guide to underlying growth and we have used
this number as the basis for our second half guidance (see
below).
Click or paste the following link into your web browser to view
the graph titled '2019 Full Price Sales Variance by Month vs 2018
(GBPm and %)'. Refer to page 2 for this graph
http://www.rns-pdf.londonstockexchange.com/rns/2774H_1-2019-7-30.pdf
End-of-Season Sale
We went into the end-of-season Sale on 6 July, with surplus
stock down -1% on last year. Clearance rates to date (the
percentage of Sale items that have been sold) are -2% lower than
expected. As a result, we have adjusted our guidance to assume a
similar reduction in Sale clearance rates in the second half.
SALES, PROFIT AND EPS GUIDANCE FOR THE FULL YEAR
Following the better than anticipated sales performance in the
second quarter, we are increasing our full price sales guidance for
the second half from +1.7% to +3.0%, in line with our full price
sales growth in May and June.
The table below sets out our revised central guidance for full
price sales, Group profit and Earnings Per Share growth for the
year to January 2020. For completeness, our previous guidance is
also shown.
The increase in our full price sales guidance is GBP70m and,
after accounting for associated costs, is expected to add GBP20m to
profit. Lower clearance rates to date, along with anticipated lower
clearance rates in the second half, are forecast to cost an
additional GBP10m. As a result, we are increasing our guidance for
full year Group profit by GBP10m to GBP725m, marginally up on last
year. We now expect Earnings Per Share to grow by +5.2%.
Previous
Full Year Full Year
Full year estimate to January 2020 Central Guidance Central Guidance
======================================== ================== ==================
Retail sales vs. 2018/19 - 5.1% - 8.5%
Online sales vs. 2018/19 +11.8% +11.0%
Finance interest income vs. 2018/19 +8.1% +9.9%
Total full price sales versus 2018/19 +3.6% +1.7%
Group profit before tax(1) GBP725m GBP715m
Group profit before tax vs. 2018/19 +0.3% - 1.1%
Earnings Per Share growth vs. 2018/192 +5.2% +3.4%
================== ==================
(1) This profit estimate excludes the impact of the transition
to IFRS 16 'Leases'.
(2) GBP280m of shares were purchased in the first half of the
year and we are assuming that a further GBP20m are purchased in the
second half of the year, with a future share purchase price of
GBP56.16.
SHARE BUYBACKS
We maintain our guidance to return GBP300m of surplus cash3 to
shareholders, by way of share buybacks. To date we have purchased
GBP280m.
(3) Surplus cash is cash flow after capital expenditure,
interest, tax and ordinary dividends but before financing any
increase in Online debtors.
INTERIM RESULTS
We are scheduled to announce our results for the first half of
the year on Thursday 19 September 2019.
Forward Looking Statements
Certain statements in this Trading Update are forward looking
statements. These statements may contain the words "anticipate",
"believe", "intend", "aim", "expects", "will", or words of similar
meaning. By their nature, forward looking statements involve risks,
uncertainties or assumptions that could cause actual results or
events to differ materially from those expressed or implied by
those statements. As such, undue reliance should not be placed on
forward looking statements. Except as required by applicable law or
regulation, NEXT plc disclaims any obligation or undertaking to
update these statements to reflect events occurring after the date
these statements were published.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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