Next has reported soaring Directory sales which offset a dip in retail revenue in its first half.
Overall the high street bellwether’s sales rose 3.2% in the 26 weeks to July 30. Retail sales dropped 1.7% but revenue from its Directory climbed 15.1%.
The retailer said that its Directory sales were “somewhat flattered” by an increased allocation of Sale stock. Full price Directory sales were still up 13.3%.
Next’s end of season Sale stock was up 7%, which was broadly in line with its sales. The retailer said clearance rates were marginally ahead of last year. New space performed well up 1.7%.
The retailer expects cost price inflation to continue at the same rate as the first half at 8% and expects prices to remain static next year.
It said: “2012 looks like it will be a more benign year for cost price inflation. The combination of a sharp reduction in cotton prices, an easing of manufacturing capacity constraints in the Far East and the annualising of this year’s VAT increase all mean that selling prices are unlikely to rise further for Spring 2012.”
The retailer’s full year profit forecast remains in line with its previous guidance which, including the gain from offloading its customer service business Ventura, ranges from £566m to £616m.
It expects to buy back £225m of shares in the current year, and has already committed to purchasing £213m.