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UK's Next profit edges lower on falling store sales

Reuters logo Reuters 21/03/2019
Imaan Hammam standing in front of a building: FILE PHOTO: Shoppers pass a branch of Next retail in London, Britain © Reuters/Toby Melville FILE PHOTO: Shoppers pass a branch of Next retail in London, Britain

LONDON (Reuters) - British clothing chain Next met guidance with a 0.4 percent fall in annual profit on Thursday, hurt by falling store sales, and it forecast another decline in the 2019-2020 year.

Next, which trades from over 500 stores in Britain and Ireland, about 200 stores in 40 countries overseas and its Directory online business, said it made a pretax profit for the year to the end of January 2019 of 722.9 million pounds.

CAMBRIDGE, UNITED KINGDOM - 2018/12/22: Next store brand logo seen in Cambridge. (Photo by Keith Mayhew/SOPA Images/LightRocket via Getty Images) © 2018 SOPA Images CAMBRIDGE, UNITED KINGDOM - 2018/12/22: Next store brand logo seen in Cambridge. (Photo by Keith Mayhew/SOPA Images/LightRocket via Getty Images) That was exactly in line with company guidance but a third straight decline. However, earnings per share (EPS) rose 4.5 percent to 435.3 pence, reflecting share buybacks.

For the 2019-2020 year Next forecast full price sales to increase 1.7 percent, with a 8.5 percent decline in retail sales more than offset by an 11 percent rise in online sales.

CAMBRIDGE, UNITED KINGDOM - 2018/12/22: Next store brand logo seen in Cambridge. (Photo by Keith Mayhew/SOPA Images/LightRocket via Getty Images) © 2018 SOPA Images CAMBRIDGE, UNITED KINGDOM - 2018/12/22: Next store brand logo seen in Cambridge. (Photo by Keith Mayhew/SOPA Images/LightRocket via Getty Images) It forecast profit would decline 1.1 percent to 715 million pounds, but said it expected EPS to rise 3.6 percent, reflecting more share buybacks.

Next said it was ready for all eventualities related to Britain's planned departure from the European Union.

Shares in Next, up 9 percent year-on-year, closed Wednesday at 5,182 pence, valuing the business at 7.3 billion pounds.

(Reporting by James Davey; Editing by Emelia Sithole-Matarise and Edmund Blair)

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