Clothing retailer Next downgrades sales guidance again
Clothing retailer Next warned that its sales could fall as much as 3.5pc this year if current trends continue, hitting profits, on concerns over a possible further slowdown in consumer spending.
Next said that it now expected full-price sales for its 2016-17 year to be between 3.5pc lower and 3.5pc higher, widening the range from a previous forecast for sales to be down 1pc to up 4pc.
The downgrade was Next's third in five months.
"The poor performance of the last six weeks may be indicative of weaker underlying demand for clothing and a potentially wider slow-down in consumer spending," Next said in its statement on Wednesday.
The company also blamed a tough weather comparison for the recent negative trends, noting that last year the same period was unusually warm. It said warmer weather in the last few days had driven a pick-up in sales.
Next's negative outlook comes as British retail sales fell at the sharpest rate in more than four years last month, after cold weather turned shoppers away from new spring and summer clothes, the Confederation of British Industry said last week.
Next said that as a result of its uncertainty over sales it was also cutting its pretax profit forecast and now expected profit in the range of 748 million pounds to 852 million pounds, compared to a previous range of 784 million pounds to 858 million pounds.
Analysts currently expect Next to report annual pretax profit of 829 million pounds according to Thomson Reuters data.
The retailer, which trades from over 500 shops in Britain and Ireland and about 200 in more than 40 countries overseas, said total sales fell 0.2pc in the 13 weeks to May 2, its fiscal first quarter, with full price sales down 0.9pc.