Next Expects Earnings to Advance 14%

LONDON -- The shares of Next have advanced 2% to 3,849 pence as of 8:30 a.m. EST after the FTSE 100 member lifted its full-year profit guidance.

Next, which operates more than 500 retail stores in the U.K. and Ireland and almost 200 stores overseas, revealed that profits before tax are now expected to come in between 611 million pounds and 625 million pounds for the year to January 2013. Next had previously expected a figure of between 590 million pounds and 620 million pounds.

Today's fresh profit projection followed 4% sales growth during November and December, combined with better-than-anticipated gross margins. Next also reckoned a lower tax rate plus share buybacks totalling 245 million pounds would help push earnings per share between 14% and 17% higher to about the 295 pence mark.

Today's statement was the third profit uplift from the retailer since September. Midway through 2012, Next had estimated earnings would advance by about 8%.

The retailer also claimed today that the year to January 2014 could witness sales growth of between 1.5% and 4%, as well as a 250 million pound share buyback. Those 2014 predictions could help earnings hit 320 pence per share and put the shares on a P/E of 12.

This morning's update confirmed Next as being among the high street's best performers of the recession. Between 2007 and 2012, the firm's underlying EPS have rallied 75%, while the dividend has almost doubled. Indeed, the shares, which plunged below a tenner during the banking crash, have been a multibagger investment for the vast majority of the company's long-term shareholders.

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