Improved trading at Next but outlook uncertain

Next, the clothing retailer, said in the last 8 weeks trading has improved and the group expects full-year profits to be in accordance with forecasts.

However, the UK’s third largest clothing retailer said although the outlook was uncertain, it was keeping its guidance for retail like-for-like sales to show a decline within a range of down 1% to down 3.5% for the second half of its financial year.

Next said retail like-for-like sales fell 2.9% in the 14 weeks to November 3, an improvement on the 4.8% fall of the first six weeks. Analysts had expected like-for-like retail sales to fall around 2.7% in the 14 week period.

The company said in a trading update that the last 8 weeks sales have shown a large improvement on the first six weeks. However, trading patterns remain extremely volatile with good sales in September giving way to a disappointing October.

The Next Directory catalogue business saw sales increase 1.2% in the 14 week period, having fallen 2.9% in the first 6 weeks. Next Directory had been expected to show a decline of approximately 0.8%, within a range of down 0.5% to down 1%. The group now anticipates Directory sales in the second half to be flat to up 2%.

Shares in Next closed yesterday at £20.52 valuing the company at £4.3 billion.

Next has over 400 stores throughout the UK and the Republic of Ireland and has 50 franchise branches in Asia, Europe and the Middle East.

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