The FINANCIAL -- Next will be the first of the major
retailers to shine a light on Christmas trade on Wednesday, when it is
expected to reveal a resilient performance boosted by online sales, according to London Stock Exchange.
The group is forecast by analysts at Seymour Pierce stockbrokers to have seen 4.1% growth in revenues at its 520 UK and Ireland stores in the three months to December 24, compared to a 3.3% drop in the previous quarter. This will equate to a 1.8% decline in like-for-like sales on a year earlier.
While this figure is flattered by the weak sales a year ago, when extreme weather conditions battered the retail sector, the group is also expected to report 9.3% growth at Next Directory, its catalogue and online business.
Later in the month, luxury goods giant Burberry, fashion firm SuperGroup and the supermarkets are expected to boast stronger performances through the crucial festive season, while Argos owner Home Retail Group, entertainment group HMV and Mothercare are predicted to reveal a Christmas flop.
Next's fourth quarter update will come amid much gloom for the retail sector, which has seen a series of profit warnings from the likes of Thorntons and HMV in recent weeks as well as companies such as D2 Jeans falling into administration.
Kate Calvert, an analyst at Seymour Pierce, said: "We believe that Next will grow market share and the performance of Directory over the period is expected to show the strength and flexibility of its multi-channel business model."
The Directory business has offset a weaker performance in the group's stores in recent months, as cash-strapped consumers, hit by higher prices and weak wage growth, turn to the internet in search of cheaper deals.
Next has openly passed on price rises to customers and kept profit margins intact despite a perfect storm of rising commodity prices and higher VAT. The group recently said it was confident there will be no further increase in selling prices in the first half of 2012.
It is expected to report pre-tax profits of £568 million for the year to January, compared to £551 million a year earlier, a 3% increase.
Elsewhere on the high street, some retailers will not be so robust. HMV is expected to reveal an 8% like-for-like decline in sales for the period on January 9, while Home Retail is forecast an 8% same-store decline at Argos on January 12 and Mothercare may reveal a 9.2% drop on the same day.
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