3Q18 TRADING UPDATE

British fashion retailer Next reported an increase of 1.3% in total full-price sales for the 12 weeks ended October 27. Next Retail (in-store) full-price sales fell further,by 8.0% year over year, compared to declines of 5.9% and 4.8% in 2Q19 and 1Q19, respectively. Next Online sales increased 12.7%, in line with 12.5% growth posted in 2Q19 but below the 18.1% surge in 1Q19. Sales from new space contributed 0.6% of total sales growth, implying comparable sales growth of 0.7% during the quarter. Finance income grew by 11.9%. In the nine months ended October 27, total full-price sales increased by 3.1%, of which 0.5% was due to new space. During this period, Next Retail sales fell by 6.3% year over year, while Next Online sales increased by 14.8%.

Outlook

The company maintained its earlier guidance for FY19, which is for:

• total full price sales to grow at 3.0% year over year;
• group profit before tax to grow at 0.1% year over year to £727 million, slightly below the consensus estimate of £730 million; and,
• EPS to grow at 5% year over year.

Next will provide its usual Christmas update for sales up to December 24 on January 3, 2019.