• Full-price sales fall 0.4%
  • Directory up 5.1%, retail sales down 3.5%
  • Pre-tax profit guidance cut by as much as 14% for 2017/18

Next’s full-price sales fell in the all-important fourth quarter, contrary to the retailer’s expectations.

Sales fell 0.4% in the 54 days to Christmas Eve.

While the fall was an improvement on the poor performance by Next in its second and third quarters, it was set against weak comparables.

One bright spot was an improved directory performance, up 5.1%. Retail sales dropped 3.5%.

In the year to date, total sales are up 0.4% but full-price sales have fallen 1.1%.

Directory sales have risen 3.6% but retail sales have decreased 4.3%.

Of the total full-price sales, 1.4% was generated by new space.

Next has historically outperformed the high street, but its performance has faltered in recent quarters.

Despite tough conditions, the retailer said that its full-year profit remained on track, though at £792m for the full year it would be at the lower end of previous guidance, which ranged between £785m and £825m.

This sum would be a 3.6% fall on last year’s pre-tax profit.

The retailer said that 2017 “looks set to be another challenging year” and that consequently it was “preparing the company for tougher times”.

It added: “The fact that sales continued to decline in quarter four, beyond the anniversary of the start of the slowdown in November 2015, means that we expect the cyclical slow-down in spending on clothing and footwear to continue into next year.”

That reasoning has resulted in Next’s cautious guidance for 2017/18 – pre-tax profit has been set at between £680m and £780m while sales in constant currency are expected to fall between -4.5% and 1.5%.

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