Next, the high street retail giant, posted positive Christmas trading figures this morning thanks to better forward planning and the right weather to get people buying winter clothes.
Bucking the wider high street gloom, full price sales during the two months to December 28 were up 5.2 per cent on last year, 1.1 per cent better than the company’s own internal forecasts.
The business, which has 500 stores and is based just outside Leicester, increased its full year profit guidance by £2 million to £727 million on the back of the figures.
In a trading update it said: “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.
“Looking ahead, initial guidance for the year ending January 2021 is for full price sales to be up 3 per cent, profit up 1 per cent, and earnings per share growth of 3.5 per cent.”
The retailer’s share price has risen steadily over the last 12 months, from £44.78 last January to around £70. Shares were steady this morning.
Online growth continued to outpace stores, it said, with internet sales of full price items up more than 15 per cent for the trading period.
Sales from bricks and mortar stores were down almost 4 per cent, year-on-year.
Most Read
Next also said it expected to generate around £300 million in surplus cash for the full year, half of which would be distributed back to shareholders through share buybacks or special dividends.
Next week will see a number of further trading updates in retail, including figures from Morrisons, Sainsbury’s, Topps Tiles, Card Factory, Dunelm, Marks & Spencer and Tesco.
Russ Mould, a director at AJ Bell investment had warned that retailers were continuing to have a torrid time overall, although there would inevitably be the “odd retail winner to have escaped the doom and gloom”.
He said: “All the market data suggested a very difficult Christmas trading period for retailers, so how is it that Next managed to buck the trend?
“The simple answer is that growth in the online channel is boosting earnings, so weakness on the high street is less of a worry.
"Also in its favour is growth in full price sales, highlighting how some shopkeepers don’t have to resort to heavy discounting to shift goods.
“But there is more to the Next story than that. The company has been quietly reshaping itself to become more relevant to the modern world.
Don’t miss
“Approximately 10 per cent of revenue now comes from selling third party brands, 9 per cent of revenue is generated outside of the 海角视频 and 6 per cent comes from selling credit to customers.
"Shops are acting as pick-up hubs for online orders and Next has been negotiating more competitive rents when leases come up for renewal.
“The 7.8 per cent growth in finance interest income in the 11 months to December 28 is a reminder of the importance of credit to its earnings.
"This is also perhaps an underestimated risk to the business in terms of any tighter credit regulation in the future and customers’ ability to settle their debts in an economic downturn.
“Next is currently giving customers what they want and in a way that is most convenient to them.
"Retailers who cannot do the same will not survive.
"However, one mustn’t lose sight of the fact that Next is not bulletproof and is still exposed to external factors like economic conditions and changes in financial regulation.
“Its shareholders have been richly rewarded with 80 per cent total return (share price gain and dividends) in the past year, and today’s update helped give the stock another lift.
"The big question is for how long can this strong run continue?”