Next has been hit by mild weather and stock issues with sales up 0.4% in the two weeks to Christmas Eve. Here is what the analysts say.

Next’s fourth quarter is disappointing, even in the light of poor weather. The weakness of its Directory business stands out relative to recent trends, with growth slowing to 2% from 10%.

“While management is probably typically too self-critical in highlighting poor stock availability as a factor in this, we should heed its warning that online competition is building as others match its service proposition.

“On the plus side, stock levels have clearly been very well managed, with stock for the end of season Sale 7% lower than last year, limiting the impact of the sales weakness on profits.” – James Collins, Stifel

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“The disappointing Directory results are likely to resurrect concerns regarding the maturity of the Directory channel.

“Next has an outstanding record and has achieved guidance even if it is at the lower end of the range in a volatile trading environment”

Freddie George, Cantor

“Next, however, has an outstanding record and has achieved guidance even if it is at the lower end of the range in a volatile trading environment.

“The stock, which has been weak over the last month, is unlikely to get a lift from these figures.” – Freddie George, Cantor

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“The Directory miss is partly down to weather but is a genuine negative surprise given the known-about switch of sales in the market in total from in-store to online.

“Directory has been slowing before these figures and more exact analysis is made very difficult by the more complex composition of this side of the business – this normally comes with the prelims in March.

“We believe that investors will regard these Directory numbers as very disappointing and will require many answers at that point.” – Tony Shiret, Haitong

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“Sales for the 60 days to Dec 24th were well below forecasts, both for retail and Directory, and it is a relief that the full-year central profit forecast is only edged down slightly to £817m, thanks to good control of costs, stocks and gross margins.

“At least Next traded full-price pre-Christmas, unlike all their competitors, but the mild weather is mainly blamed for the sluggish 0.4% rise in total Next brand sales and Next have overlaid the year-on-year shift in the temperature on their by now traditional weekly sales graph for the period.” – Nick Bubb, independent analyst

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“Although Next’s results are not as strong as we have previously witnessed, they are well ahead of the curve, and notably ahead of what we expect Marks and Spencer to announce later this week.” – James McGregor, Retail Remedy