Full price sales at Next increased 4.5% for the 26 weeks to 28 July, compared to the same period last year, driven by online and the prolonged heatwave in the UK.
Online sales were up 15.5%, boosted by international sales, Next Label and “modest growth” of Next own label stock in the UK. In store sales fell 5.3%.
Total sales growth for the half, including markdown and full price, was up 3.9% on 2017.
In the 12 weeks to 28 July full price sales were up by 2.8% on last year, due to the “prolonged period of exceptionally warm weather”. Next said the heatwave had “almost certainly” pulled sales forward from August so it is maintaining its full year sales and profit guidance for the year.
The business went into Sale on 7 July, which was one week earlier than last year. Next said surplus stock in the first half had been well controlled and it went into the Sale with around 20% less stock than last year.
It added that clearance rates to date have been better than expected and have added approximately £4m to profit, however, this has largely been offset by higher warehouse and distribution costs.
Next said cash flow remains strong and it still expects to generate around £300m of surplus cash after deducting interest, tax, capital expenditure and ordinary dividends, but before financing any increase in online debtors. It intends to fund any increase in debtors through long‐term bonds and bank facilities.
In January the retailer set out a plan to return £300m of surplus cash to shareholders by way of share buybacks. It has now completed this programme and expects share buybacks to enhance Earnings Per Share (EPS) by 4.7% in the current year.