In its latest trading statement published yesterday, Next plc (NXT) reported a 2% rise in the third quarter sales compared to 2018. Its year-to-date sales are up 3.5%.
In particular, the firm noted that “sales in September were adversely affected by unusually warm weather and we saw a significant improvement in October when temperatures fell.”
In other words, cold is good for Next. The fact that the firm is maintaining its financial guidance for the year provides some comfort for investors, who have been bidding up the stock lately.
Next share price broke out to new multi-year highs this year, possibly due to a rise in expectations that its Christmas trading will be better than expected (see Featured Chart). This pushes Next year-to-date returns to an impressive 66%.
With prices now firmly on an upward trajectory, Next’s upside target is likely to be at 7,200p, where some resistance may emerge (see below).
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Interestingly, Next is not alone in asserting a bullish price trend. JD Sports Fashion (JD) is also on a roll, with prices are on a spectacular bull trend. Meanwhile, Boohoo.com (BOO) is also on a long-term uptrend.
All these suggest that the fashion market in the UK is rotating into newer firms who are capturing a larger slice of the spending market.
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