BUSINESS LIVE: Next Earnings Forecast; JD Sports sales are disappointing; Markets are keeping expectations for rate cuts in check

Next plans to halt price rises for shoppers in the new financial year as its own input costs stabilize for the first time in three years and profits rise.

The fashion and home retailer raised its annual profit outlook for the fifth time in eight months on Thursday after better-than-expected Christmas sales.

The retail giant saw full-price sales rise 5.7 percent in the nine weeks to December 30, with 10 percent growth in the final two weeks before Christmas Day.

Lindsay James, investment strategist at Quilter Investors:

'Minutes released last night by the Federal Reserve… temper the optimism the market took away from comments following Fed Chair Powell's meeting in mid-December, further stating that rates should remain high for 'some time' .

“Given that market expectations around rate cuts were already quite spicy, this confirms that things will not move as quickly as some would like and it must be accepted that the Fed is still very data-driven around inflation and economic data.”

Charlie Huggins, manager of the 'Quality Shares Portfolio' at Wealth Club:

'Next has pulled another rabbit out of the hat today, leading to a further upgrade of full-year sales and profit expectations. It has once again shown why it is considered one of the best run retailers around.

'British consumer spending appears to have defied gravity. A strong labor market and rising wages have helped ease inflationary cost pressures, meaning consumers have continued to fill their Christmas stockings with Next products despite the gloomy economic headlines.

'Next's online sales were particularly strong, due to better stock availability and excellent operational execution. This is in stark contrast to other retailers such as Superdry, which have struggled in the prevailing economic climate.

“The future for Next looks bright and is reflected in the group's guidance to return to revenue and profit growth in the coming year.

'Next's core proposition clearly resonates with British consumers and is complemented by intelligent acquisitions of brands such as Fat Face. Now that inflation is falling and wages are rising, the economic picture also looks a lot less gloomy than at the beginning of last year.'

The UK's electric car revolution is being undermined by a lack of charging points.

Just 16,178 public chargers were installed last year – 44 per day, and well short of the 110 needed to meet the government's target of 300,000 in Britain by the end of the decade.

The figures come from an analysis by the Mail of data from load finder service Zapmap. They will fuel concerns about 'range anxiety' that is making many petrol and diesel drivers hesitant to switch to electric vehicles (EVs).

London-listed shares are trading higher this morning, led by energy shares following oil prices higher, while Next jumps to a record peak after the clothing retailer raised its annual profit outlook.

Energy stocks rose 1.4 percent to hit their highest level in more than six weeks as oil prices continue to rise on ongoing concerns about supply disruptions in the Middle East.

Next up is the biggest gainer in the FTSE 100, which rose 5 percent to an all-time high after the retailer raised its profit forecast for the year ending January 2024 for the fifth time in eight months.

BP shares rose 1.7% after the oil and gas company terminated its agreement with Equinor to sell power to New York state from its proposed Empire Wind 2 offshore wind farm.

JD Sports Fashion fell 17 percent to a two-month low after the sportswear retailer cut its full-year profit forecast due to higher costs, a slowdown in consumer spending and subdued apparel demand amid milder weather conditions.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown:

'Next's Christmas trading update gave investors plenty to be cheerful about. There was a 5.7% increase in full-price sales for the nine weeks to December 30, ultimately leading to the group boosting its profit forecasts.

'Full year pre-tax profits are now expected to be £20 million higher at £905 million this year, exceeding the group's own expectations.

'Successfully keeping the full retail price to avoid discounts is one of the reasons why Next boasts some of the best margins in the industry. But it's a tricky strategy, especially if you're expanding your online presence and introducing third-party brands.

'If we highlight some key figures: the group's turnover growth was largely driven by the online channel, where turnover grew by almost double digits.

Next also still has a strong presence on the shopping streets and growth remains positive here. Next also issued some guidance for the new financial year, with pre-tax profits expected to grow to around £940m.

'This is because UK wages are expected to rise in line with, if not ahead of, inflation, and Next's own cost inflation has fallen to negligible levels, which should provide some relief to margins in the new year.'

Tesco and Sainsbury's have proven to be the biggest winners among British supermarkets this Christmas, alongside Aldi and Lidl.

The pair were the only traditional grocers to gain market share in the 12 weeks to December 24, according to data from industry group Kantar.

Shoppers also flocked to Aldi and Lidl in larger numbers. It came as the sector celebrated its busiest Christmas since 2019, with shoppers spending a record £13.7 billion last month alone – or £477 per household.

JD Sports Fashion has lowered its full-year profit forecast, citing higher costs and subdued consumer spending that will hurt peak season demand.

Weaker demand and more promotional activity than expected also negatively impacted gross margins in the peak 22-week period ending December 30.

JD Sports added that full-year gross margin will be slightly lower than last year.

Apparel sales growth was also affected by milder weather conditions, JD said.

The company, which sells Nike, Adidas and other sportswear collections, now expects pre-tax profits and adjusted items of £915 million to £935 million for the year to February 3.

That is lower than previously expected profits of around £1.04 billion, in line with market expectations.

When the massive 2,670-passenger Diamond Princess cruise ship was quarantined off the coast of Japan in February 2020 following a Covid outbreak, it became a grim omen of the chaos that would soon befall the global economy.

The spread of the virus soon began to hit the travel sector, with ships anchored and passenger planes grounded.

Travel restrictions effectively brought the industry to a standstill as many companies lost cash in the form of maintenance costs.

Next has raised its annual profit forecasts for the fifth time in eight months after the clothing retailer beat sales forecasts in the final nine weeks of 2023.

However, the group, which trades from around 460 stores in Britain and Ireland and has an online presence in more than 70 countries, warned that problems with access to the Suez Canal, if allowed to continue, were likely to lead to some supply delays . deliveries at the beginning of the year.

It said: 'If profits increased by £20 million, £17 million came from the £38 million year-to-date sales decline, and £3 million from an improved forecast for full-price sales in January.'