Next Plc, the U.K.’s second-largest clothing retailer, reported first-quarter sales that beat analysts’ estimates as a warmer end to April prompted shoppers to buy spring fashions after a cold start to the season.
Next brand sales rose 2.2 percent in the 14 weeks ended May 4, the Leicester, England-based retailer said in a statement today. That compares with the 1.1 percent median estimate of 11 analysts compiled by Bloomberg, and growth of 3.9 percent in the prior quarter. Next Directory catalog and online sales rose 8.9 percent, while retail sales fell 1.9 percent.
Sales have been “extremely volatile” in the last eight weeks as shoppers balked at spending due to a cold start to the spring season and then released pent-up demand at the end of April, Next Chief Executive Officer Simon Wolfson said in a telephone interview. The retailer reiterated its target for brand sales to gain 1 percent to 4 percent this fiscal year.
The results are “slightly better than market expectations, mainly due to the Directory,” said Kate Calvert, an analyst at Cantor Fitzgerald. “Whilst a pretty mature business in terms of the number of stores, Next continues to drive growth by pursuing gains in its offer, service and efficiency.”
The shares rose as much as 2.1 percent and were up 1.9 percent at 4,491 pence at 8:23 a.m. in London. The stock has climbed 21 percent this year.
Next said earlier this year that it had a “quiet” start to the fiscal year as the coldest March in 50 years weighed on sales. There was a “marked upturn” in sales at the end of the quarter, the retailer said today.
“We anticipate that the continuing decline in real earnings will depress discretionary spending for at least the next 18 months, if not longer,” Next said in the statement.