Next expects sales to fall amid supply issues

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Next has said that it will expect sales to dip next quarter, causing shares to fall.

The reduced sales guidance is due to diminishing pent up demand and supply issues according to the retailer.

“We do not expect sales to continue at the level seen in Q3 and are maintaining our guidance for full price sales to be up +10% in the fourth quarter,” said Next in a statement.

Steve Clayton, fund manager at HL Select, commented: “NEXT have delivered a stellar sales and profit performance in recent quarters, but the going is getting tougher. The company will not be alone in facing delays and higher costs in sourcing and distributing stock.”

“Nor will they be the only one whose customers face a squeeze on their spending money, when the gas bill turns up. All the evidence so far is that NEXT will handle these issues better than most. “

“But profits are still likely to be impacted. So far the company are saying that higher costs are absorbing the benefit of stronger than expected demand. But with demand set to come under increasing pressure as consumers struggle with higher bills, the outlook is becoming less certain,” he added.