Next cautious on 2012

Fashion chain Next said the strong performance of its Directory unit continues to compensate for the slightly disappointing trading at its Retail stores.

Interestingly the firm says its post-Christmas sale period has gone well with final clearance rates slightly ahead of 2010. This will give investors some heart about the retailing sector.

However, Next also makes clear that "despite a good final week before Christmas, November and December sales were disappointing".

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The Retail unit saw sales (excluding VAT) fall 2.7% in the period from August 1st to December 24th versus the corresponding period the year before, while Directory sales improved by 16.9%.

Sales for the Next brand overall rose 3.1%, in line with the full year guidance range given in November of between 2.5% and 4.0%.

Next expects its full year profit before tax figure to come in "£7m either side of £565m", representing an increase of 4% on the prior year and an earnings per share increase of 11.3% after buy backs.

In 2012 Next is cautious, saying it expects "profit before tax only slightly up on this year". The group expects to make £200m in surplus cash which will be returned to shareholders through share buy backs.

Full year results will be released on March 22nd.

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