Next cautious amid ‘extremely volatile’ trading
The group posted total full-price sales up 1.3% in its third quarter, but said performance was ‘highly dependent’ on the weather.
Retail giant Next has warned that trading remains “extremely volatile” as directory sales continue to offset tough conditions on the high street.
The group posted its second quarter in a row of rising total full-price sales – up 1.3% in its third quarter to October 29 – but saw a 7.7% plunge across its high street shops and said trading was “highly dependent” on the weather.
A 13.2% jump in sales across its Directory arm helped push overall sales higher.
While cooler temperatures in August and September helped overall sales surge at the start of its third quarter, the recent warmer autumn weather saw trading come under pressure once more.
It is also expecting total sales to slip back into reverse in its fourth quarter as it comes up against a stronger quarter over last Christmas.
A 0.3% fall in sales for the year so far is a more “reliable guide” to the underlying trend for the year, according to the group.
Next said its sales performance has remained “extremely volatile and is highly dependent on the seasonality of the weather”.
It added: “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.”
Next kept its central profit outlook for the year, but narrowed the range to between £692 million and £742 million, from its previous guidance range of between £687 million and £747 million.