LEICESTER, United Kingdom — Next delivered a mixed report on Christmas season sales that cheered investors looking to end the year on a high note after months of struggle in the retail sector.
Strong sales in the weeks before Christmas helped make up for disappointing results in November, the UK clothing retailer said Thursday, a result that was better than some analysts anticipated. At the same time, the company trimmed its estimate for 2019 profit.
Retailers were on edge through the end of last year after online-only ASOS cut its sales forecast, and many in the UK discounted heavily ahead of Christmas. Next’s performance may signal a reprieve for others in the sector — Marks & Spencer Group and Debenhams — that report later this month.
The shares gained as much as 7.1 percent in London, the most intraday since September 25.
Next reported a 1 percent gain in Christmas sales, though it extended the reporting period until after the holiday, muddying any comparison with last year’s performance. For at least the past five years Next has reported Christmas trading to December 24. Much of that gain was based online, where sales grew 15 percent, compared to a 9 percent decline in stores.
Retailers discounted heavily in the days ahead of Christmas, rather than wait for December 26 to kick off sales. Next held back from the price slashing, but didn’t cite it as a reason for the profit cut. Competitors that discounted more heavily will have to prove that extra sales made up for the thinner margins.
Next cut its profit forecast for the year to £723 million ($908 million) from £727 million.
By William Mathis; editors: Eric Pfanner, John Lauerman and Marthe Fourcade.