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(Sharecast News) - Retailer Next delivered a materially betterthanexpected first half on Thursday, prompting a £12m upgrade to its fullyear profit guidance and reinforcing confidence in its margin trajectory.
Next said fullprice sales rose 7.7% in the six months ended 1 August, taking total sales to £3.28bn, while total sales including markdowns climbed 8.9% to £3.54bn. Pretax profits climbed 10.5% to £569m, with net margins improving 0.3ppt to 16.1%, helped by higher boughtin gross margins, warehousing efficiencies and profitable digital marketing.
The FTSE 100-listed firm said the half was "much better than we originally anticipated", with international growth remaining the standout as directtoconsumer sales rose 24% despite Middle East disruption, and WOBL brands delivering exceptional growth - up 32% online in the UK and 82% overseas.
UK Nextbrand sales were £7m lower yearonyear, as expected, reflecting the reversal of last year's competitorrelated gains and the impact of strong WOBL and thirdparty growth.
Next upgraded its fullyear profit guidance to £1.255bn, up from £1.243bn previously, reflecting slightly stronger sales expectations and additional cost savings, mainly in warehousing. Management added that the firm's progress continued to come from decentralised initiatives across product, international, infrastructure and cost control.
As of 0830 BST, Next shares were up 2.09% at 14,865p.
Reporting by Iain Gilbert at Sharecast.com
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