Next cuts top-end profit guidance

The fashion bellwether said pre-tax profit for the year to January 2018 would now come in between £680m and £740m.

It had previously guided between £680m and £780m.

Next said total full price sales for the year would not grow more than 0.5% compared to 2016/17, having previously forecast a year-on-year rise of up to 2.5%.

The narrowing of its profit range came after Next posted a 3% drop in full-price sales during the 13 weeks to April 29.

Total sales, including markdown sales, slipped 2.5% during the period.

Next’s Directory sales continued to outperform its store-based business, rising 3.3% in the quarter.

But retail sales dragged down overall performance, plummeting 8.1%.

Next said performance in March and April was “better” than in February, helped by a “later, warmer Easter.”

But it warned that “the UK consumer environment remains challenging” in the fashion and homewares sectors in which it operates.

In its trading statement, Next added: “In our full-year results announcement in March we talked about omissions in some of our product ranges.

“We said that we expected some improvements from May onwards, but that our ranges would not be where we wanted them to be until the Autumn season in September. We still believe this to be the case.”

At its full-year update in March, when profits fell for the first time in eight years, Next boss Lord Wolfson warned that the coming year would be “another tough year” for the business.

Fashion retailers have suffered amid a consumer shift away from spending on clothing, price inflation as a result of sterling’s devaluation and weaker growth in real incomes.

Increases in the national living wage, business rates and the introduction of the apprenticeship levy have added further cost headwinds.

Next has provisionally scheduled its interim results update, covering the 26 weeks to July 29, for Thursday, August 3.