The FashionUnited Index closed down Wednesday, losing over tenpoints down to a final 1246.3. Yet the international fashion benchmark index closed above other international references such as the Dow Jones or Hong Kong based Hang Seng.
In the UK, stocks rose for a second day as Next Plc reported a jump in first-half earnings and investors speculated that the slump in shares during the past two months isn’t commensurate with the outlook for companies’ earnings, published Bloomberg.
Next soared 6.2 percent to its highest price since 2007 after the U.K.’s second-largest clothing retailer increased its annual profit forecast. Next has been proving its resilience in a difficult year, as the British retailer released on Wednesday. Group revenue for the first half was 3.6% higher than last year and profit before tax was up 8.5% on a continuing basis. “The business remains strongly cash generative and continued buyback of shares further enhanced growth in earnings per share, which were 18.6% ahead of last year”, company said during the presentation of the results. The interim dividend increases by 10% to 27.5p per share.
“Looking ahead to our full year results, we believe that VAT exclusive NEXT Brand sales for the year will be between 2.0% and 4.5% ahead of last year, which would result in NEXT Group profits being up between +0.4% and +8.7% and EPS up between +7.5% and +16.4%. Early indications are that retail headwinds are likely to ease as we move into 2012. We have strong evidence that there will be little or no inflation in our own prices and it seems probable that other inflationary pressures will ease as commodity price rises begin to annualize in the first quarter of 2012.”
To face constrained production capacity and rising costs of raw materials such as cotton, they have changed their buying process, placing larger orders earlier in the buying cycle. This approach has improved stock availability and helped us negotiate prices, mitigating some of the effect of underlying cost price rises, the report revealed. Sale rose in line with sales, up 6.6% against VAT inclusive sales up 5.1%.
Next´s stock gained 0.24% by the end of the session, as well as other British retailers such as Ted Baker or French Connection that also closed in green. In the same vain, Asos Plc rose 1.6 percent to 1,690 after HSBC Holdings Plc upgraded its recommendation on the shares to “overweight” from “neutral.” There was no need however to leave the London Stock Exchange to find the worst performance within the index, as Mulberry lost nearly 4pc, becoming the worst value of the day.
Elsewhere, HSBC has reiterated its 'overweight' recommendation for Inditex and raised the price target for the fashion chain from €74 to €75. The British broker explained that the results that will be released on September 21 by the Spanish textile company will not disappoint the market thanks to the group's exposure to emerging countries. The broker points out that the Inditex development of the network and expansion in southern countries is an important catalyst. At early afternoon, its shares were down 1.36% to €58.04.