Next quarterly sales drop ‘better than expected’

Sales made through the fashion retailer’s physical stores slumped 72% during the three months to July 25, while online sales increased 9% year-on-year. 

Next said the overall drop in full-price sales of 28% during the quarter was “much better than we expected and an improvement on the best case scenario given in our April trading statement”.

This result was bolstered by online sales growth as Next warehouses returned to normal capacity over the past 13 weeks.

Since stores reopened on June 15, the in-store sales decline eased to 32% year on year.

Total full-price sales were down just 8% over the last six weeks of the quarter, faring better than markdown sales which were down 12% year on year.

Next attributed this “underperformance” in markdown sales to a lack of advertising to avoid overcrowding in reopened stores, and limited stock capacity online.

The fashion group has modelled three potential scenarios based on full-price sales for the full year being down 18%, 26% or 33%. 

Next has said the overall results put it in line with the stress test scenario of full-price sales being 26%. This scenario assumes sales in the second half will be down 19%.

If this scenario remains accurate, Next predicts a £195m profit before tax for the full year.