Next sales edge up in latest quarter but growth is slow
Next’s trading statement on Wednesday showed that fashion retail is challenging at present, even for the strongest players in the market. In the 13 weeks up to 29 October, full-price sales rose only 0.4% year-on-year. That said, this was slightly ahead of its expectations.
The company is maintaining its guidance for full-year profit before tax of £840 million, up 2.1% on the year.
Although the economic situation in the UK has been declining and consumer confidence has fallen through the floor, the company does seem to have been seeing some improvement in the sales trend in the last five weeks. Sales in that period were up 1.4% and were boosted by one particularly strong week at the end of September when temperatures dropped and sales of cold-weather clothing improved. That holds out some hope for the winter season as a whole.
But product sales clearly remain a challenge. The biggest contributor to the 0.4% increase during the quarter was finance interest income, which was up 8.9%. By contrast, total product full-price sales dropped by 0.1% with online down 1.9%. At least retail stores in the UK and Ireland managed to rise with a 3.1% increase.
The company continues to expect full-price sales for the rest of the year to be down 2%.
We won't hear from Next again until after Christmas, when it delivers its trading statement for the festive crucial shopping period. That’s due on 5 January.
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