High street fashion-to-homewares giant Next (NXT) is marked up 3.8% to £67.65 on a reassuring Christmas trading update. The clothing colossus' healthy clearance rates mean full-year profits should now be within £10 million either side of £775 million, £5 million ahead of the previous £770 million midpoint guidance.
As foreshadowed by Shares, Next, which posted a profit warning in October after unusually mild temperatures left winter lines unsold, has shrugged off worries about a short-term weather blip and the impact of heavy discounts across the UK high street to deliver a solid festive and fourth quarter update.
The FTSE 100 fashion giant, which resisted 'Black Friday' promotions and held off from discounting until Boxing Day, flags full price sales up a better-than-expected 2.9% in the 58 days to Christmas Eve.
Although Next entered the Boxing Day sales with 'significantly more stock than last year', healthy subsequent stock clearance rates should see profits coming in at around £775 million. This is not only £5 million ahead of the guidance given alongside October's profit warning, it also represents very creditable 11.5% year-on-year growth that should translate into a 13.5% earnings per share advance.
Chief executive Simon Wolfson issues a relatively cautious outlook statement, highlighting some demanding comparative numbers for the Spring and Summer seasons. Yet Next, which has already returned £361 million of surplus cash through buybacks and three 50p special payouts in the year to dates, declares a further 50p special dividend, to be paid in February.