Next is leaving Marks & Spencer trailing in its high-heeled wake

While M&S' sales slip, Next has raised its profit forecast again. Try not to gloat guys...

by Rachel Savage
Last Updated: 02 Apr 2015

It’s a sunny morning over at Next towers: the retailer announced first-half sales had jumped 10.7%, beating analysts’ expectations of a 9.6% rise, and raised its profit forecasts for the second time this year.

Full-year profits will be £775m-£815m, the company said in a statement, a £25m hike from the previous £750m-£790m estimate. ‘Profitable new space’ (aka money-making new shops) added 2.4% to Next’s growth, while directory sales (online plus a few stray catalogues) surged 16.2% in the 26 weeks to 26 July.

It makes for a sorry-looking comparison to Marks & Spencer, which reported clothing sales had fallen for a 12th straight quarter earlier this month. The former pride of Britain’s high streets also had more than a few website issues, which meant its online sales fell 8.1%.

Next’s profits overtook M&S’ earlier this year and its continuing to put space between it and its old rival. While its shares have climbed more than 36% in the last 12 months, and are up more than 2.5% to 6,685p in mid-morning trading today, Marks ‘n’ Sparks has fallen over 7% to 435p in the same period.

Marc Bolland needs to do something to placate investors soon or he risks facing the same fate as Philip Clarke at Tesco.

Next shares

M&S shares  Source: Google Finance

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