Next is defying the doomsayers and maintaining their full year year profit guidance even though the economic environment is showing signs of a slowdown.
Next are maintaining their guidance for £840m full year profit before tax, an +2.1% improvement on last year.
Despite next maintaining profit guidance, there have been cracks appearing in their sales activity in October with their weekly sales in the week 16th October dropping 3.7% compared to the same week last year. The week of 23rd October was down 1.3%.
That said, in the last week of September sales jumped 11% highlighting the seasonal nature of Next’s sales figures.
“An element of sales volatility is to be expected for any retailer, with weather always playing a part. Even so, these are quite large fluctuations and may say something about the fragile state of the economy,” said Charlie Huggins, Head of Equities at Wealth Club.
“The uncertain economic backdrop is underlined by Next’s caution for the remainder of the year, with the group expecting sales to fall by 2%. Bear in mind that includes perhaps high-single digit price increases, so volumes are quite weak.”
Notwithstanding the choppiness in Next’s sales figures, their Retail sales rose 3.1% while online sales dropped 1.9% in the third quarter.
Next shares were trading 2.4% higher at 5,082p at the time of writing.
