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Blow-out Christmas sales for Next (NXT) but investors steer clear

By Adrian Holliday

09:48, 6 January 2022

Photo of Next shop front displaying their company logo, white on black background
Next will pay a share dividend on 28 January – Photo: Shutterstock

Investors were little moved this morning by Next’s 20% sales rise on pre-pandemic Christmas sales and hiked pre-tax profit guidance of £22m to £822m.

Next (NXT) stocks fell 1% in early trading to 7,958.00p. Shares have seen a 8,482.00p high and a 7,214.00p low over the past 12 months. 

Some of the unease was Next’s warning that 2022 would be “tough”. Next is worrying about rising consumer inflation pressures as well as its own costs, freight and manufacturing. It is pencilling in weaker growth for the upcoming quarter. 

The fashion and homewares player reported £70m more sales than anticipated during the Christmas period thanks to more online orders and occasionwear. It also appears to have side-stepped some of the low stock and supply chain stresses which have plagued other retailers.

Growth hampered

“We were expecting sales growth in Q4 to be weaker than Q3, however, a strong revival in NEXT branded adult formal and occasionwear significantly improved sales throughout the final period,” the retailer reported earlier. 

“In the run up to Christmas our stock levels were materially lower than planned,” it added. “We also experienced some degradation in delivery service levels as a result of labour shortfalls in warehousing and distribution networks. 


7.87 Price
-2.490% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0039%
Overnight fee time 21:00 (UTC)
Spread 0.03


0.08 Price
-53.690% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0039%
Overnight fee time 21:00 (UTC)
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434.24 Price
-3.120% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0039%
Overnight fee time 21:00 (UTC)
Spread 0.39


246.18 Price
-2.160% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0039%
Overnight fee time 21:00 (UTC)
Spread 0.22

“The fact that our sales remained so robust in these circumstances is, we believe, testament to the strength of underlying consumer demand in the period.”

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Sale stock lower

Its surplus stock was “much lower” than expected with its end-of-season Sale stock down 18% compared to two years ago. “The reduction in Sale stock was mainly the result of better than expected full price sales in the period.”

The high street chain paid a special 110p per share dividend worth £140m in September. “The Board has decided to return a further £205m to shareholders by way of a second special dividend of 160p per share.” 

This will be paid on 28 January.

Read more: Fed hawks and multiple risks slay stock markets

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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