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Shares in retailer Next (LON:NXT) surged upwards today boosted by news it has “modestly” increased its profit guidance for the next year after reporting improved sales in its first half.
Next said it is now expecting pre-tax profit of between £575 million and £620 million for the year up to January 2013, up from its previous guidance of between £560 mln and £610 mln, despite the gloomy retail environment.
Overall sales were up 4.5 per cent in the 26 weeks to 28 July 2012, compared to the same period last year driven by the performance of its catalogue and online Directory business, which increased sales by 13.3 per cent in the half.
The clothing and homeware retailer said lower like-for-like retail sales had been offset by performances at its new stores resulting in overall growth of 0.2 per cent.
Sale stock for its end of season sale increased by 8.7 per cent from the same period last year, but the firm said cash recovery was as expected.
After a £200 million share buy back it expects full year EPS to grow by 6 percent more than the growth in pretax profit.
Broker Seymour Pierce said in a note: "While not quite a gold medal winning performance from the official Olympic supplier of clothing and homewares, Next has delivered a highly commendable one nonetheless, slightly above the top end if its guidance."
It rates the shares a 'hold' with a target price of 3,350 pence.
The firm was the biggest riser on the FTSE100 today, closing the session up 6.46 per cent, at 3,427 pence.