Shoppers' Passion for Fashion Sees Next Put Up Profit Forecasts Again
Byline: Nick Goodway
NEXT'S chief executive Simon Wolfson told the City to upgrade its profit forecasts for the second time in just two months today, after what he called a "better than expected third quarter."
Seven weeks ago analysts were told to raise their forecasts for the fashion firm's pre-tax profits from [pounds sterling]400 million and settled on an average around [pounds sterling]442 million.
Today Wolfson said that they could add [pounds sterling]30 million to that figure, lifting their forecasts to [pounds sterling]472 million which is 10% ahead of last year's total of [pounds sterling]429 million.
Next shares, which have more than doubled in the last 12 months, rose another 81p to 1891p today.
"The consumer is being pretty sensible," said Wolfson. "Inflation and mortgage rates remain encouragingly low and unemployment, while still a risk, is not preying on everyone's mind. They are not splurging out but they are still spending as much as they did last year and saving more."
He said one area where Next had seen a marked change was in bad-debt provisions and the number of customers in arrears at its Next Directory business -- a sure sign, according to Wolfson, that consumers are getting their personal finances under control.
October saw a "noticeable pick up in sales" which he said was partly due to comparisons with the same month last year when the full effects of the credit crisis and collapse of Lehman Brothers really hit the High Street.
But Wolfson also takes some credit from his own efforts to up Next's game in the fashion stakes.
He said: "We are making decisions later and changing fashion trends -- whether they be narrow lapels or padded shoulders -- more quickly. …