TIDMNXT
RNS Number : 3316Y
Next PLC
04 May 2023
Date: Embargoed until 07:00 hrs, Thursday 4 May 2023
Contacts: Amanda James, Group Finance Director Tel: 0333 777
(analyst calls) 8888
Alistair Mackinnon-Musson, Rowbell Tel: 020 7717
PR 5239
Photographs: https://www.nextplc.co.uk/media/image-gallery/campaign-images
First Quarter Trading Statement - 4 May 2023
HEADLINES
-- In the thirteen weeks to 29 April full price sales(1) were
down -0.7% versus last year, moderately ahead of our guidance
for this period, which was to be down -2%.
-- We are maintaining our sales and profit guidance for the full
year, with profit before tax forecast to be GBP795m and Earnings
Per Share (EPS) of 501.9p.
(1) Full price sales are VAT exclusive sales (including the full
value of commission based sales), less items sold in Sale events
and Clearance. They also exclude Joules sales and sales through
Total Platform. Full price sales are not statutory sales.
SALES PERFORMANCE
Full Price Sales Performance by Business Division
Full price sales performance by business division, versus last
year is set out below.
13 weeks to 29 April
Full price sales by division 2023/24 vs 2022/23
===================================== ====================
Online - 1.6%
Retail - 0.6%
====================
Total Product full price sales - 1.2%
Finance interest income +7.4%
====================
Total full price sales inc. interest
income - 0.7%
Total Trading Sales Including Markdown and Clearance Sales
Total Trading sales(2) , including markdown(3) and Clearance
sales(4) , were up +1.2% versus last year, this was driven by
higher Clearance sales. Last year we had very little Clearance
stock available, as a result of stock shortages in the run up to
Christmas 2021. This year, Clearance stock levels have returned to
normal and are commensurate with pre-COVID levels.
(2) Total Trading sales exclude sales through Total Platform and
Joules. Trading sales are not statutory sales.
(3) Markdown sales are those attributed to our main Sale events
(mid-season and end-of-season Sales).
(4) Clearance sales are those attributed to previous seasons'
stock, sold through our Online Clearance tab and Clearance Outlet
stores.
GUIDANCE FOR FULL PRICE SALES, PROFIT AND EARNINGS PER SHARE
Our guidance for full price sales and profit before tax remains
unchanged from that given in our Year End Results in March. For
clarity, our guidance is set out below.
Full Price Sales Guidance
Although our first quarter performance moderately exceeded our
sales guidance, we believe it is too early in the year to alter our
overall sales expectations for either the half or full year. To
maintain our first half forecast, we have moderated our sales
forecast for the second quarter, which is now planned to be -5%
down on last year (previous guidance was -4%). This adjustment
seems reasonable, as some of the first quarter's success,
particularly in holiday clothing sales leading up to Easter, might
have been pulled forward from the second quarter.
Shareholders might wonder why we are so cautious for sales in
Q2. As we explained in March, the second quarter last year
benefited from unusually warm weather and pent-up demand for events
such as weddings, proms etc.
The table below sets out our guidance compared to last year and
four years ago. As can be seen, the four year comparison looks
sensible, at +18.7% for both halves of the year.
Full price sales guidance for Versus Four year variance
2023/24 last year versus 2019/20(5)
============================== ========== ==================
First half (e) - 3.0% +18.7%
Second half (e) - 0.2% +18.7%
========== ==================
Full year guidance - 1.5% +18.7%
(5) Analysts' note: Over the last two years we compared sales
against the year commencing 2 February 2019 in order to account for
the 53-week year in 2020/21. When comparing this year, which
commenced 29 January 2023, against 2019/20 we are comparing against
the year commencing 27 January 2019, to account for the calendar
drift that has occurred over the last four years.
NEXT Profit and EPS Full Year Guidance
The table below sets out our unchanged guidance for the full
year.
Full year Versus
NEXT Profit and EPS guidance guidance last year
============================= ========= ==========
NEXT Profit before tax GBP795m - 8.7%
Pre-tax EPS 656.1p - 6.4%
Post-tax EPS 501.9p - 12.5%
========= ==========
CASH FLOW, SHAREHOLDER DISTRIBUTIONS AND INVESTMENTS
We are maintaining our guidance for GBP220m of surplus cash
generation (after interest, tax, capital expenditure and ordinary
dividends). It remains our intention that surplus cash will be (1)
returned to shareholders through share buybacks or (2) invested in
equity stakes in potential Total Platform clients. In the first
quarter we purchased GBP55m of shares at an average price of
GBP67.52 and spent GBP8.5m acquiring the brand name, domain names
and intellectual property of Cath Kidston.
SECOND QUARTER TRADING STATEMENT
Our next sales update will cover the first 26 weeks of the year
to 29 July 2023 and is scheduled for Thursday 3 August 2023.
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.
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END
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