Next shakes FTSE in a flat session

In the UK, retail stocks were higher on Thursday after Next raised its profit forecast

after reporting stronger fourth quarter sales.

The UK’s second-biggest clothing retailer by market share said it now expected annual earnings to be around 618 million pounds rather than the 590 – 620 million pounds forecasted before. It said total sales rose 3.9 percent between November 1 and December 24, the most important trading period of the year, in line with guidance, reported Reuters.

“Careful management of stock and swift clearance activity has resulted in a good Christmas for Next,” said analysts at Oriel Securities while Freddie George, retail analyst at Seymour Pierce stressed: “Next is highly cash generative, tightly run and looks to continue to execute on the basics of giving the consumer great product and capitalising on its leading multi-channel position. However, the sector has performed strongly over the last year and sector rotation is likely to lead to a period of consolidation.”

In the wake of the news, Next topped the FTSE 100, up 2.3 percent to 38.58 pounds, the best level the shares have ever reached since listing in 1982, reminded Bloomberg. Meanwhile, Marks and Spencer rose 0.8 percent to 386 pence, Ted Baker added 1.5 percent (trading above 11.77 pounds) and Debenhams gained 2.6 percent to 118.1 pence.

Across the Atlantic, American Apparel announced a 14 percent rise in same-store sales in December. The controversial dance inspired apparel company said wholesale net sales increased 12 percent for the month and total net sales increased 14 percent to 63.5 million dollars (more than 7 million dollars over last year’s 56 million it reported a year ago).

"December represents our 19th consecutive month of positive comparable sales,” said chairman and CEO Dov Charney. “We experienced sales growth in almost all major markets and product categories. Our comparable store sales increase in retail and online is particularly important considering our performance last December when we had comparable store sales of 12 percent. “ In the same vein, “Additionally, we expect to see corresponding improvements in gross margin through leverage of fixed overhead at the factory and store level,” advanced Cherney.