Next today reported pre-tax underlying profit jumped 9% to £622m last year but the new year has got off to a slow start. The City studied its balance sheet carefully.

“Stores and online continue to become increasingly in inter-dependant; for example, over 20% of Directory sales are delivered through stores and over 60% of returns come back that way.

“Consequently, although uneconomic stores will be closed where possible, overall the retailer remains on the expansion trail. During 2012 Next added 250,000sq ft to its portfolio and intends to add at least the same amount this year, stating that “there remain many towns and cities with potential for wider ranges in larger stores.

“Retail is being re-shaped and the role of stores is changing. Unfortunately this is taking place during one of the worst economic environments in centuries, making it an especially painful process. It is therefore disappointing that retailers feel like they are having to fight against councils rather than working alongside them for the best possible outcome.” – Matt Piner, Conlumino

“We are not inclined to change our £649m profit before tax forecast at this stage, although will confirm post the meeting. The warning that ‘the first few weeks of the year have been quiet’ has negative read across to Marks & Spencer and Debenhams and sees Next sales growth year-to-date currently running at around +1%.” – Bethany Hocking, Investec

“Today’s final results from Nextcover the period to the end of January and that it would be interesting to see whether ‘the snow’ at the end of January hit sales and dampened down the full-year PBT outcome post-Xmas of £611m-£625m: well, profit before tax came out at £622m (note that the low/high range for the new-year was set at £560-610m this time last year…) and there is no mention of the snow.

“The sting in the tale is that after setting out the reasons for the profit before tax range for this year of £615m-£665, on the assumption that brand sales rise by 1%-4%, Next note the impact of cold weather and say ‘the first few weeks of the year have been quiet and serve to reinforce a more cautious approach. At present, sales are at the bottom of our target range, though we expect this situation to improve’. Next took some flak for making a meal of the impact of the weather in early autumn, so the market may shrug this warning aside and focus on the tremendous long-term record.” – Nick Bubb, independent retail analyst

“Next has reported full-year profit before tax of £622m in-line with recent guidance of £611m-£625m. The ‘new news’ is how much Directory sales have slowed. From a run rate of +11.2% pre-Christmas, and +13.3% in the first half, Directory sales growth for the year ended at +9.5%, implying a big slowdown to nearly -3% in January.” – Caroline Gulliver, Espirito Santo