High Street retailer Next (NXT.L) has reported strong Christmas trading, saying a cold November helped spur sales ahead of forecasts.
Next said on Friday that full-price sales rose by 5.2% in the three months to 28 December. That was 1.1% ahead of internal forecasts.
“We believe our sales performance in the period was helped by a much colder November than last year and improved stock availability in both our Retail stores and Online,” the retailer said in a statement.
As a result of the strong sales, Next upgraded its forecast for 2019 profits by £2m. Sales for 2020 are now also expected to rise by 3% and profits should climb by 1% in the year.
“This is another reassuring trading statement from a well managed company,” Shore Capital retail analysts Greg Lawless and Clive Black wrote in a research note on Friday.
“Online sales growth accelerated highlighting the benefit of click and collect through the store network. The retail decline was better than expected and online sales growth offset the retail drag, growing overall Next sales ahead of plan, which has led to the marginal earnings upgrade.”
Online sales rose by 15.3% in the crucial Christmas trading period, offsetting a 3.9% decline in High Street sales.
Looking ahead, Next said it expects to have £290m in surplus cash by the end of 2020 and raised the prospect of a special dividend to return cash to shareholders if things go to plan.
Shares in Next rose 1.2% in early trade on the FTSE 100.
Next is the first major retailer to report sales over the crucial Christmas trading period. A slew of others will report next week, including Ted Baker (TED.L), Debenhams, and Moss Brothers (MOSSB.L), as well as supermarkets Tesco (TSCO.L), Sainsbury’s (SBRY.L), and Morrisons (MRW.L).