Next sticks to full-year forecasts despite autumn sales growth slowdown

Retailer Next has seen sales growth slow in its third quarter as both high street and online trading eased back.

The fashion and homewares chain reported a 1.3% rise in full-price sales for the three months to October 27 – up 2% including interest income from nextpay customers.

It said high street retail sales tumbled 8%, while online sales rose by 12.7%.

The result marks a slowdown on the 4.5% rise in full-price sales seen in its first half.

It comes after the latest figures from the Confederation of British Industry (CBI) showed retail sales growth slowed more than expected in October as consumers reined in their spending following a summer shopping spree driven by warm weather and the World Cup football tournament.

However, Next kept its full-year guidance unchanged, with the group pencilling in annual sales growth of 3% and a 0.1% rise in group pre-tax profit to £727 million.

The group upped its full-year profit guidance in September after a better-than-expected first half, posting interim pre-tax profits up 0.5% at £311.1 million.

But last month’s earnings cheer came as it also warned over the threat of gridlock at ports and price hikes from increased tariffs if the UK crashes out of the European Union with no deal.

In the document outlining the group’s Brexit no-deal contingency plans, Next also cautioned that another sharp fall in the value of the pound and increased tariffs also posed a threat.

Next said in the “unlikely event” that free-trade agreements were not put in place, it could send the cost of imported goods soaring by up to around £20
million, which could push up prices by around 0.4%.