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Next sees festive sales rise but cuts profit forecast

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Next said full-price sales rose 1.5pc between October 28 and December 29, in line with expectations.

Next said full-price sales rose 1.5pc between October 28 and December 29, in line with expectations.

Next said full-price sales rose 1.5pc between October 28 and December 29, in line with expectations.

Fashion chain Next has cut its annual profit forecast and predicted falling earnings over the year ahead despite revealing a solid Christmas performance.

The group said full-price sales rose 1.5pc between October 28 and December 29, in line with expectations.

It saw high street store sales slump 9.2pc over the Christmas trading period, though this was offset by a 15.2pc surge online.

But it downgraded its profit forecast to £723m (€803m) for the year to January, from the £727m (€807m) previously expected, and said the next financial year will remain under pressure.

It blamed the gloomier profit outlook for the current year on higher sales of seasonal products, such as personalised gifts and beauty products, which have a lower profit margin than its clothing ranges.

The group also said it faced higher operational costs on online sales.

For the year to January 2020, Next predicted profits will fall 1pc to £715m (€794m) while full-price sales growth will ease back to 1.7pc from the 3.2pc expected for 2018-19.

The group said: "In the year ahead, we are assuming a similar economic environment as that experienced in the second half of the current year.

"Within this guidance, we expect retail sales to be down 8.5pc and online sales to be up 11pc."

But it said this came with a "high degree of uncertainty" and does not factor in the "potential benefits of a smooth transition or the downsides of a disorderly Brexit".

PA Media