Next forecasts lower full-year sales and profit

Next, the UK's second-biggest clothing retailer, lowered its full-year sales forecast, saying some collections aren't doing as well as they were a year ago.

Full-price revenue growth for the current fiscal year is anticipated to be 1.5 per cent to 5.5 per cent, the Leicester, England-based retailer said in a statement Thursday, compared with a December 30 forecast of 2.5 per cent to 7.5 per cent.

Next also forecast pre-tax profit in a range below analyst estimates, sending the shares down the most in almost five months.

“Although the consumer economy looks benign, we remain very cautious in our sales budgets,” the company said.

“Whilst we are happy with most of our current product ranges, we recognise that some collections are not as strong as they were at this point last year.

In addition, during the spring and summer seasons, we face very tough comparative numbers from last year, when sales were assisted by unusually warm weather.”

The reduced sales forecast is atypical for a business that in recent years has grown to surpass main UK competitor Marks and Spencer in earnings and market value.

Prospective growth for the year is low by comparison with Next’s historical performance, chief executive officer Simon Wolfson said, while seeking to downplay concern over the fashion collections.

Bloomberg