Next shrugs off poor weather with forecast beating sales growth | City & Business | Finance

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High street bellwether Next shrugged off the cold and damp spring as it reported better-than-expected first quarter sales growth of 5.7 percent.

The fashion and homewares chain had previously forecast growth of five percent for the 13 weeks to April 27 and despite its strong showing in the first quarter, it expects the second to be weaker. Due to the tough comparisons with last year, which saw Next benefit from warm, sunny weather, it forecasts a second quarter sales drop of 0.3 percent.

Online was the star performer for Next during the first quarter, with sales up 8.8 percent, while its store sales were flat. Its finance arm saw its income rise 6.4 percent. Despite that, Next maintained its forecasts for full year sales and pre-tax profits growth at six percent and 4.6 percent respectively.

Over the last 18 months, Next’s share price has more than doubled, it upgraded its forecasts several times and twice reported record annual results. Guy Lawson-Johns, equity analyst at Hargreaves Lansdown, said given its record of smashing shareholders’ expectations, Next could end up disappointing if it only meets them this year.

“Where question marks remain is whether delivering expected results will soon be good enough. Next has made a habit of under promising and over delivering to investors. While this often makes for good reading, it means markets have grown to expect more,” he said.

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