4 January 2012 – trading update

Slightly disappointing sales from Next have seen overall growth of 3.1% in the period from 1 August to 24 December.  Sales in the high street have fallen by 2.7% over the period although Next Directory continues to make good progress with sales up by 16.9%.  Whilst in the circumstances these sales figures are not too bad, the company had said in November that it was looking for sales growth of between 2.5% and 4.0%.   Traditionally the company has reported growth towards the top end of its guidance hence the disappointment with the figures.  Nevertheless, the company did not discount its products in the run up to Christmas and therefore maintained operating margins.  Full year profits are expected to be in line with forecast and although the new financial year is being approached with some caution the fall in the share price this morning of over 100p is a buying opportunity.  BUY.