Next sales increased 5.4%, behind its expectations of 10%, in its third quarter to October 25. Retail Week highlights what the analysts say about the results.
“No surprise that warm weather hit Q3 sales performance, although Next also has taken the opportunity to cut Q4 guidance. All apparel retailers face the same challenging start to a/w trading; the scale of downgrades should be modest.
“Next has once again produced weekly sales growth figures for the quarter, which show a strong performance in August, offset by a heavily negative September due to the warm weather. There has been some catch up in October, but not enough to meaningfully lift sales growth.” – John Stevenson, Peel Hunt
“The read-across/outlook into Q4 is not encouraging. Lower than anticipated full-price sales mean growth forecasts for peak are lowered, and we suspect this represents a risk across the industry of a highly promotional run-in to peak. Next continues to be rightly valued on a sector premium reflecting management focus on driving marginal retail gains and shareholder returns.” – Alistair Davies, Investec
“Our view is that the current slippage is completely due to the mild weather, the underlying trend for consumption remains positive and the comparatives for next year ease. It does appear, however, that we are seeing more extreme weather patterns.” – Freddie George, Cantor
“As Next continues to ramp up space growth in its Home fascia, it will increasingly have something to fall back on when the temperamental British weather dampens growth in the fashion division.
“In any case, few would bet against Next achieving a very swift turnaround should the weather gradually prove more conducive to consumers updating their winter wardrobes. With the nights now drawing in, it will surely not be too long before the mercury lowers and Next resumes its position as the darling of the clothing category.” - David Alexander, Conlumino
“Next, like many of its competitors, is feeling the effect of the unseasonably warm weather. Later this week temperatures are set to hit 20C in some areas of the south. It’s hard to sell an autumn/winter range in that kind of weather. Even when weather or trading conditions are against it, Next has a knack for outperforming its peers. Next is an extremely resilient retailer with a forensic knowledge of its core customers and this will help it through the current volatility in market conditions.” – James McGregor, Retail Remedy
Next cuts full-year profit expectations as warm autumn hits sales
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Next's third quarter results: What the analysts say