Next warns on profit as warm weather hits sales
Fashion and homewares retailer Next has cut its full year profit guidance after unseasonably warm weather in September and October impacted sales of its autumn/winter clothing ranges.
The retailer is now expecting profit to be in a range of between £750 million to £790 million from a previous £795 million. This will represent an increase of between 8% and 14% on the previous year.
In statement Next said the season had started well due to a cool August, but this was more than offset by much weaker sales in September and October.
In the third quarter to 25 October, sales grew by 5.4% compared to Next’s original expectation of 10%. While retail sales at Next’s high street stores increased by 2.4%, Next Directory sales climbed by 9.7%.
Next said that the volatility of current trading and its very strong performance last year meant it has also reduced its sales expectations for the fourth quarter. It is now budgeting for full price sales in the final quarter to be within a range of -2% to +4% which compares to an initial fourth quarter expectation of +4%. The retailer said this implies that full year total sales growth will be between +6% to +8% compared to the previous forecast of +7% to +10%.
Next warned in September that its sales and profit expectations could be reduced if colder weather failed to materialise during October.
