(Free Video) The 2 Secrets To Finding Small-Cap, Hidden Gem Stock Opportunities To Dramatically Grow Your Portfolio Going Into Q4.
Next's half-year sales rose 5.4% to £2.6bn Half-year pre-tax profit of £419.8m, up 4.8% Full-year pre-tax profit guidance raised from £845m to £875m Next's Half-Year Earnings
NEXT plc (LON:NXT)'s half-year results continued its hot streak of beating market expectations on the upside. A 3.2% increase in branded full-price sales over the first half helped group revenue climb 5.4% to £2.6bn. That's led the group to raise its full-year pre-tax profit guidance again, now expected to land in at £875m, up from £845m.
Successfully keeping full-priced sales front and centre to avoid discounts is one of the reasons Next can boast some of the best margins in the sector. But it's a tricky strategy to nail, especially alongside expanding its online presence and introducing third-party brands to its offering. The online channel now accounts for more than half the group's sales.
But rapid growth on this front means these operations aren't as efficient as they could be. It opens the door for improvement though and it's something management will need to deliver on as more and more consumers choose to shop from the comfort of their own home.
Next still has a strong high-street presence too. Its shops typically have shorter, more favourable leases than peers, and are more focussed on out-of-town retail outlets that have fared better. That gives extra flexibility and should allow it to make the best of tougher conditions. But it's important not to get too carried away.
Next still expects high levels of inflation to weigh heavy on consumers' wallets in the second half. And despite multiple upgrades to Next's full-year guidance, it still only amounts to broadly flat year-on-year pre-tax profits – highlighting just how tough the retail sector can be in times of economic uncertainty.
Article by Aarin Chiekrie, equity analyst at Hargreaves Lansdown (Free Video) The 2 Secrets To Finding Small-Cap, Hidden Gem Stock Opportunities To Dramatically Grow Your Portfolio Going Into Q4
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.