Shares in UK fashion retailer Next slumped as much as 5.7pc in London after it reported "slightly disappointing" sales over the Christmas period and warned that profit growth in the next financial year will be dented by economic factors.
The decline in Next shares during the day was the sharpest drop since August 2010. They recouped some of that fall by the end of trading, but were still off over 3pc.
Warm winter weather and increased discounting by competitors contributed to "subdued" sales in the final quarter, the retailer said. Pretax profit in the fiscal year that ends in January 2013 will be "slightly up," Next also said.
Total sales rose 3.1pc in the 21 weeks ended December 24. That missed the 3.7pc median estimate of 12 analysts compiled by Bloomberg.
A 17pc gain in revenue at the 'Directory' home-shopping unit was offset by a 2.7pc drop at Next stores.
"Trading over the peak period appears to have been weaker than feared in retail," said Matthew McEachran, an analyst at Singer Capital.
The company's "cautious guidance" may lead to reductions of about 3pc in consensus profit estimates for next year, according to Mr McEachran, who has a "fair value" recommendation on the stock.
"We were expecting some kickback from the snow last year, but it was almost as if the snow hadn't happened," said Next chief executive Simon Wolfson.
"We're being very cautious about our sales budget," he said.
A raft of high street retailers will report Christmas trading figures in coming weeks.