Next reports 'difficult' third quarter

On the back of a 3.5% decline in third-quarter sales, Next has adjusted its sales guidance and profit forecast.

When reporting on half-year trading in August this year, Next warned that the coming quarter would be difficult but stated that it was accelerating store openings.

Next Directory sales were flat during the quarter, while total sales (including markdowns) were 0.4% up for the year to date.  The retailer confirmed it has narrowed its full year sales guidance to -1.75% to +1.25%, compared to -2.5% to +2.5%.

Next said of the results: "In August full price sales were subdued following the much larger end-of-season sale in July, and in September we traded against our best month last year.

"October sales improved significantly, as comparative weeks last year became less challenging."

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Analyst View:

Martin Lane, a representative at www.money.co.uk, said: 

“Our shopping habits have changed drastically in the past decade and Next has done little to keep up in a fiercely competitive market. They have some serious work to do to shift their brand image and attract new customers. 

“The unusually mild weather for this time of the year has dampened shoppers desire for warm winter clothing and added extra pressure at a time when Next is already struggling. Add into the mix rising wage costs and sterling taking a nose dive and Next clearly have their work cut out if they are to ride out these stormy seas ahead.”  

Source : Insight DIY

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