Next shares fall after missing sales forecasts

By
Nicole Jeary
-
Next
A spokesperson for Next warned of a challenging trading environment

Shares in Next (LON:NXT) fell on Wednesday, after third quarter sales missed forecasts.

The high-street retailer warned of “extremely volatile” trade in the quarter, as in-store sales fell 7.7 percent.

The fall in store sales was ultimately offset by a boost in online sales, up 13.2 percent in the three months to October. Overall, total sales grew 1.3 percent for the period.

A Next spokesperson commented:

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“Sales performance has remained extremely volatile and is highly dependent on the seasonality of the weather.”

In August and September sales were significantly up on last year, as cooler temperatures improved sales of warmer weight stock. The change in sales trend came at precisely the same time UK temperatures became warmer than last year.”

As a result, the retailer revised its full-year profit forecast downwards to between £692 million and £742 million, compared to previous forecasts of between £687 million and £747 million.

Neil Wilson, senior market analyst at ETX Capital, commented: “Next better hope that British shoppers are a little less fickle than the weather, because sales performance is so volatile the firm has no idea what to expect over the vital Christmas trading period.

“This is a worry, although there does seem to an improving trend in sales growth throughout the year that may calm nervous investors.”
This follows a disappointing set of retail figures for the UK September, with third-quarter retail growth slowing to a year-on-year rate of 1.5 percent, according to the Office of National Statistics (ONS).
Last week, high-street giant Debenhams (LON:DEB) reported a plunge in profits of 44 percent for the year, similarly blaming an “uncertain” trading environment.
Retailers have been feeling the pressure of a volatile pound, alongside changing consumer trends in favour of the convenience of online shopping.
Shares in Next are currently down as much as 7.84 percent as of 11.17AM (GMT), as the market reacts to the results.