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Next Christmas sales: NXT numbers set to show tough festive period for UK retail

By David Burrows

09:15, 3 January 2023

Retailers sales signs on London high street. Photo Getty
Retailers started sales early this year on UK high streets. Photo Getty

Fashion and home interiors retailer Next (NXT), is traditionally the last major chain store to go live with its year-end sales.

However, markdowns went live on Christmas Eve this year, suggesting the FTSE 100 stalwart has not proved immune to the challenges posed by inflation, dreadful weather and the cost-of-living crisis.

The company downgraded full-price sales and profit expectations for the year back in August, and as Russ Mould, investment director at AJ Bell points out, another disappointment would be no great shock now, especially as the shares are down by 30% in the past year and trading no higher than they did in January 2014.

Next (NXT) share price chart

The seasonal trading update due this Thursday will not quite cover the full fiscal fourth quarter to the end of January. It will be benchmarked against the reduced guidance given by boss Lord Simon Wolfson alongside August’s first-half results and re-iterated when the omni-channel retailer produced its third-quarter sales update in November.

Back then, Lord Wolfson projected a 2% year-on-year drop in full-price sales in the fourth quarter and 4.8% growth for the year overall.

“The anticipated drop in the festive period reflects not just the pressure on consumers’ incomes – and Next’s customers may be classic examples of the squeezed middle – but also the tough base for comparison as last year benefited from an easing in the pandemic, an end to lockdowns and pent-up demand,” Mould explains.

He adds that analysts will also look to the sales mix. In the third quarter, online full-price sales fell 1.9% year-on-year, retail grew by 3.1% and financing interest income by 8.9%.

“Higher interest rates may have helped income in the last-named although it will be interesting to see if the company flags any increase in bad debts, if shoppers are having to rely more heavily on credit to make their purchases, Mould says.

EPS is expected to rise faster than net profit thanks to the reduced share count that results from the share buyback programme which ran through to July at a cost, according to the interim accounts, of £228m.


35,434.70 Price
+0.150% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 2.2


4,560.40 Price
+0.130% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.8


15,996.90 Price
+0.050% 1D Chg, %
Long position overnight fee -0.0221%
Short position overnight fee -0.0001%
Overnight fee time 22:00 (UTC)
Spread 2.0


16,028.70 Price
+0.120% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 1.8

As for shareholder returns, Mould suggests it is unlikely Next will discuss its dividend for 2022 or buyback policy for 2023 in Thursday’s trading update.

“These issues are likely to be left to the full-year results in late March, although analysts are looking for a final payment of 131p a share, to take the full-year total to 197p, following the 66p interim distribution”.

Ben Yearsley, investment consultant at Fairview Investing, agrees that Next won't be immune from the challenges retail faces this year.

What is your sentiment on NXT?

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‘Resilient business’

“Judging from the amount of emails I received, most fashion retailers started their sales on Christmas eve or earlier! Next has proven over time to be probably the most resilient and well-run fashion retailer and I expect them to weather the storm”.

“That's not so say the share price won't fall, but once we are in more clement times the quality of the business will shine through.”

Marketbeat indicates that analysts are currently positive on Next –  with two out of seven brokers rating the stock a ‘buy’ and two a ‘hold’.

The consensus price target is at the £6.32p level – with the stock currently priced at around £5.94.   

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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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