Analysts expect first profits fall at Next in almost a decade
Analysts are forecasting a fall in profits at former high-flyer Next when the retailer reports on Thursday (March 23) and are also looking for information on potential price rises.
Next had previously been one of the safest bets on the high street with its share price rising steadily and the firm reporting higher profits every year since 2009.
But the fashion and furnishings retail giant’s recent trading updates have shown it to be among the strugglers in UK retail. It had a weak Christmas and times could get tougher as it has warned that it will pass price rises onto customers as import costs rise due to the pound’s fall after the Brexit vote.
Analysts now expect profits to have fallen 4% to £792m in the 12 months to January 31 with the having business suffered from consumers re-assessing their discretionary spending priorities. Next itself earlier predicted full-price sales down by around 1%.
Only Monday it was reported that footfall to UK stores has fallen as Britons spend more in leisure destinations, and Next itself has highlighted a consumer shift away from buying fashion towards eating out and trips to the cinema.
And the company has predicted another tough year in 2017 as well as falling profits well into next year.
Next is currently running a “half price or even less” spring sale, something it did not previously do on a regular basis, suggesting full-price sales strength has remained elusive.
The company has battled to recover its sales growth trajectory as its once-dominant online operation, Next Directory, has suffered from newer pureplay competition such as Asos and boohoo.
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