NEXT posts 15% rise in online and catalogue sales with profits exceeding £300m
High street retailer NEXT has saw sales via its online and catalogue business, NEXT Directory, increase by 9.5 per cent for the year ending January 2013.
According to NEXT's latest financial results the growth differential between NEXT Retail (high street stores) and NEXT Directory (e-commerce and catalogue) has narrowed with the two now working in tandem.
In his statement, NEXT chairman John Barton reports that "over 20 per cent of Directory sales are delivered through our stores and over 60 per cent of the returns come back that way" showing just how the two branches of the business work together.
NEXT Retail profits saw a 2.3 per cent rise from £323.7 million to £331.1, in comparison NEXT Directory reported a 15.1 per cent increase in profit from £262.6 million to £302.1 million.
Underlying earnings per share before exceptional gains grew 16.6 per cent to 297.7p with Barton commenting that the retailer proposes to "increase our full year dividend to 105p".
This is the four consecutive year that NEXT has seen growth in both its earnings per share and dividend.
Barton adds: "Cash flow was particularly strong, helped by the timing of capital expenditure and stock intake at the year end. We continued with share buybacks, buying 7.5 million shares at an average price of £32.13. During the year we returned £390 million to shareholders through share buybacks and dividends."
Of NEXT's results, James McGregor, director of retail consultants Retail Remedy, said: "Just hours after the Chancellor revealed a set of unrelentingly grim economic forecasts, NEXT clearly didn’t get the memo.
“Britain’s most adept multichannel retailer continues to power ahead, delivering a modest but healthy increase in sales and an impressive jump in pre-tax profit.
“Truly stellar performance by its online and mail order division – where profits are up 15 per cent - is at the heart of its success.
“By comparison its bricks and mortar stores underwhelmed – revenue was static and profit rose by a modest 2.3 per cent. But this relative weakness should not be viewed as a failure, more a reflection of the changing habits of consumers.
“NEXT's physical stores continue to be profitable and play an important part in the brand’s overall shopping mix, boosting its visibility and magnifying the success of its online offering."
McGregor warns its not all plain sailing as "it's not clear how the brand will replenish is ageing customer base as they get older" and that to "stay ahead of the pack" the retailer needs to "continue to exceed customer expectations whilst tightly controlling costs".