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Next And Ted Baker Grow Annual Profits

Fashion chains Next (Other OTC: NXGPF - news) and Ted Baker have announced strong increases in annual profits on improved sales growth.

Next reported a 12.5% rise in underlying profit before tax to £782.2m in the 12 months to 31 January, powered by sales growth at both its stores and its Directory internet business.

The firm, which trades from over 500 stores in Britain and Ireland (Other OTC: IRLD - news) and almost 200 stores overseas, enjoyed a 10.4% increase in profits at its retail store division on the back of a near-5% rise in sales.

Next Directory sales rose more than 12%.

The company said it had benefited from improvements to design content in its ranges and it was continuing to release some new products much closer to core seasons.

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But the retailer lowered its forecast for sales growth of 1.5%-5.5% for its 2015-16 year, with pre-tax profit expectations running at between £785m-£835m.

Chief executive Lord Wolfson warned: "Although the consumer economy looks benign, we remain very cautious in our sales budgets.

"Whilst we are happy with most of our current product ranges, we recognise that some collections are not as strong as they were at this point last year.

"In addition, during the Spring and Summer seasons, we face very tough comparative numbers from last year, when sales were assisted by unusually warm weather.

"There is a potential upside in the second half as the comparative performance last year weakens, particularly in the third quarter".

Next's performance is in stark contrast to that of Marks & Spencer (Other OTC: MAKSF - news) , which has struggled to grow its clothing offering.

The Next share price rose 14% over its last financial year while the value of M&S fell more than 10% over the same period.

However, Next stock lost 5% at one stage on Thursday in the wake of its revised sales expectations.

Ted Baker, which operates from 398 outlets worldwide including licenced stores, said new store openings helped revenues for its year to 31 January rise 20.4% to £387.6m.

Profit before tax jumped 25% to £48.8m.

Chief executive Ray Kelvin said: "This was another excellent year as we continued to develop Ted Baker as a leading lifestyle brand across global markets and distribution channels.

"We continue to invest in the brand as we develop in new markets where we see long term growth.

"All the while, we remain totally focused on the quality, design and attention to detail which underpins every area of the Group.

"Our customers' reaction to our Spring/Summer collections across markets has been very encouraging and we are excited by our new store openings in the coming months, which include a first store devoted to showcasing our extended licence product range in Spitalfields, London".