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Next has kicked off the Christmas reporting season by upgrading its profit guidance after full-price sales had been “better than anticipated” during the festive period.

The FTSE 100 clothing group said that in the nine weeks to 30 December, full-price sales were up 5.7% versus last year, which was £38m better than its previous guidance of 2% growth for the period.

Consequently, Next has increased its full-year profit before tax guidance by £20m to £905m, up 4% versus last year.

Of the £20m increase, £17m came from the better than expected sales recorded to date and £3m comes from an upgraded forecast for full-price sales in January.

Guidance for full-price sales on continuous business is to be up 2.5%.

After accounting for the effect of recent acquisitions, Next expects group sales, including subsidiary companies, to be up by 6% for the full year.

Over the Christmas quarter, Next saw full-price online sales rise by 9.1% to take growth to 7.7% for the half year.

In-store full-price sales were up a more modest 0.6% in the quarter.

The performance in both retail and online was ahead of our expectations, with online’s performance boosted by service improvements versus last year.

End-of-season sale stock has been “well controlled”, with the group going into the period with 12% less surplus stock than last year and expecting clearance rates over the life of the sale to be broadly in line with last year.

Next shares have jumped 4.9% to 8,474p on the news.

Morning update

Elsewhere in the wider retail world there was less positive news from sports retailer JD Sports, which has issued a profits warning this morning.

For the 22 weeks to 30 December 2023, constant currency organic revenue growth was 6.0% with like-for-like growth of 1.8%, which was “slightly behind our expectations”.

Apparel revenue growth was impacted by milder weather from the second half of September, while the peak trading season, across the market, was softer and more promotional than the group anticipated, reflecting more cautious consumer spending.

It now expects full-year organic revenue growth to be 8%.

Meanwhile, the gross margin rate for the period is in line with last year, which is lower than expectations due to the elevated level of promotional activity during the peak trading period.

Therefore it now anticipates the full-year gross margin rate will be slightly lower than last year and profit before tax and adjusted items will be between £915m and £935m.

Régis Schultz, CEO of JD Sports Fashion, said: “We have made good progress against our five-year strategic plan, delivering global organic revenue growth of 6% in the period, against very tough comparisons with last year, and opening over 200 new JD stores in the year.

“Our key markets have seen increased promotional activity during the peak trading season, driven by a more cautious consumer, but we continue to grow market share. We are confident in our strategy and we continue to invest in our supply chain, systems and stores, supported by our strong cash generation and healthy balance sheet.”

Retail property investor Supermarket Income REIT has declared an interim dividend for period from 1 October 2023 to 31 December 2023 of 1.515 pence per ordinary share.

The second quarterly dividend will be paid on or around 14 February 2024, with the ex-dividend date being 11 January 2024.

All shareholders who are entitled to receive the second quarterly dividend will receive it in cash.

On the markets this morning, the FTSE 100 is back up 0.2% to 7,696.7p so far this morning.

Early risers, along with Next, include Glanbia, up 8.4% to €15.18, C&C Group, up 2.1% to 148.4p and Bakkavor, up 1.4% to 85.8p.

Fallers include Naked Wines, down 4.1% to 54.2p, Coca-Cola Europacific Partners, down 1.3% to 60.2p and Premier Foods, down 0.9% to 132p.

Yesterday in the City

The FTSE 100 continued to slide on its second day of trading in 2024, falling back 0.5% to 7,682.3pts.

Grocery retailers were a positive story after the strong Kantar market share numbers issued yesterday morning.

Marks & Spencer was up 2.4% to 282.5p, Tesco up 1.6% to 297.8p and Sainsbury’s 1.5% to 303.3p.

Elsewhere risers included Science in Sport, up 6.4% to 12.5p, Deliveroo, up 2.7% to 130.4p, McBride, up 2.1% to 86p, AG Barr, up 1.6% to 518p, PayPoint, up 1.6% to 520p and Haleon, up 1.2% to 328.2p.

Yesterday’s fallers included Glanbia, down 7.9% to €14.00, Fever-Tree, down 1.9% to 987p, Pets at Home, down 1.4% to 305p, DS Smith, down 1.3% to 302.2p and Premier Foods, down 1.3% to 133.2p.

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