Next blames warm weather for poor Christmas sales

Next brand full price sales in the 60 days from October 26 to December 24, 2015 were up 0.4 percent. The company did not discount stock before announcing the ‘End of Season Sale’, so gross margins were maintained. Stock for the End of Season Sale was 7 percent lower than last year and clearance rates broadly in line with last year.

The company said, while warm weather may have been the main reason for a difficult fourth quarter, it believes that Next Directory’s disappointing sales were compounded by poor stock availability from October onwards. In addition, the company also pointed out that online competitive environment is getting tougher as industry-wide service propositions catch up with the Next Directory.

Guidance for the full year

Full price sales for the year to date are currently over 3.7 percent ahead of last year, just below the bottom end of its previous guidance of 4 percent to 6 percent. With good control of margins, costs and stock, along with healthy clearance rates, the company expects profits for the full year to remain within its profit guidance of 810 million pounds (1,189 million dollars) to 845 million pounds (1,240 million dollars), issued in October.

Its revised central forecast for full year group profit is now 817 million pounds (1,199 million dollars), which the company says could increase or decrease by seven million pounds (10.2 million dollars) depending on trade in January. 817 million pounds (1,199 million dollars) would represent an increase of over 4.4 percent on last year.

Next brand full price sales growth in the year to January 2017 is anticipated to be between over 1 percent and 6 percent and profits are expected to grow in line with sales.