Next shares dive on poor sales and cautious outlook
SHARES in Britain's second-biggest clothing retailer, Next, slumped yesterday after it said sales in August and so far in September were "disappointing".
It said the period had been "unusually quiet", sending its shares plummeting by over 7pc in London.
The decline came even as Next maintained its full-year profit outlook and said the first half of the year had been "better than expected".
It said first-half sales were 4.8pc higher year-on-year at £1.56bn (€1.94bn), while underlying pre-tax profit advanced 10.2pc to £251.3m (€313.8m).
Its Next Directory business proved particularly strong in the first six months. Sales at the unit climbed 13.3pc to £551.7m (€687.6m), while profit there jumped 22.1pc to £137.7m (€172m). Sales and profit at its retail outlets was relatively flat.
"We remain cautious about the economic outlook," said the company. "Disappointing sales in an unusual August and early September reinforce the wisdom of this conservative approach."
The comments from Next were reinforced by department store operator and food store owner John Lewis. It reported a 60pc jump in first-half profits, to £144.5m (€180.4m) as revenue surged 8.6pc to £3.9bn (€4.86bn). However, it warned that consumer demand "remained fragile" and doesn't expect the strong growth to continue. John Lewis also owns the Waitrose supermarket chain.
"If the economy had a weather forecast, the outlook would be overcast --patchy rain for the foreseeable future," said Next.
"In the run-up to the credit crunch individuals, businesses and government lived beyond their means. It will take some time to work our way back to affording the lifestyle to which we became accustomed."