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Next growth subdued in the run-up to Christmas

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Next today reported relatively healthy online growth but subdued in-store sales in the run-up to Christmas.

The multichannel fashion retailer said its directory sales, which predominantly take place online, grew by 7.5% between October 28 and December 24, compared to the same time last year. In-store sales, by comparison, grew by just 0.5%. Overall, Next sales grew by 2.9% during the period.

The figures contrast with faster growth earlier in the year, when weather was warmer. In the year-to-date, Next said, directory sales grew by 12.9%, retail sales by 4.6%, and overall Next brand sales by 7.7%.

The retailer broke down autumn and winter sales growth down by week, showing its fastest growth – compared to the same time last year – came in August, especially in the last week of the month, while more moderate sales growth could be seen in October and December. September and November, however, saw sales fall compared to last year as weather remained unseasonal.

“During the first half of 2014, sales were significantly assisted by unusually warm weather,” Next said in today’s statement. “There is potential upside in the second half as our sales comparisons weaken, although uncertainty in the UK political outlook and turbulence in the international economy present potential downside risks.”

Next said it went into the sale period with “significantly more stock than last year”. But since clearance had been in line with expectations, it predicted full-year profits were likely to meet or exceed previous expectations, coming in at £10m either side of £775m. If full-year profits reach £775m they will be 11.5% ahead of last year.

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