As Next reported a 2.2% sales in its first quarter despite the unseasonable weather, Retail Week summarises the City’s reaction to the update.

“The good news for the shares is that Directory sales growth was 8.9%, ahead of the third quarter and fourth quarter run rate, despite the cold weather, and ahead of our estimate of plus 6%. Retail like-for-like sales, however, declined further than expected.

“It is clear that, in line with the John Lewis data, trends have improved considerably in the past four weeks driving a stronger exit rate to the quarter. The company warns that much of this uplift will reflect pent up demand and considers the +2.2% growth to be the best indicator of future growth.” - Robert Evans, Espirito Santo

“Brand sales growth of 2.2% is better than our 1% forecast. Retail sales were -1.9%, broadly in line with consensus of circa -1.5%. Directory sales were +8.9%, a few percentage points better than consensus of +6%.

“The relatively outperformance of Directory is also positive from a profitability standpoint, given the c.10 percentage point higher operating margin of Directory versus Retail. We remain Holders – we fundamentally like the strategy and management, but struggle to see near-term catalysts.” - Bethany Hocking, Investec

“Despite battling ‘highly volatile’ trading conditions, this has been a relatively strong start to the year for Next. Subdued Retail division sales indicate that Next, like many other retailers, fell victim to the bitterly cold March weather. Nevertheless, it has sustained overall total sales growth of +2.2% for the period, driven largely by the robust performance of the Directory division, with Directory sales up by +8.9%.

“As it endeavours to strike the right balance between fashion space, home space and online, Next’s clear-minded strategy is indicative of a retailer that is engaging with both the natural consumer trend towards internet shopping as well as the gradual move of big retailers towards out-of-town locations.” - Anusha Couttigane, Conlumino

“Whilst a pretty mature business in terms of number of stores, Next continues to drive growth by pursuing marginal gains in its offer, service and efficiency which enhances its already highly profitable multichannel business. This, together with using its strong net cashflow to buy back shares, has resulted in improving return on investment capital over the last four years.” Kate Calvert, Cantor Fitzgerald