Next reports that Q3 full-price sales were up +2.0% YoY, slightly ahead of guidance given in September, and bolstered significantly by income from finance interest.
Product full-price product sales were up +1.6% in the quarter, as online growth of +9.7% managed to offset a -6.3% dip in physical retail sales – a pattern which reflects each channel's performance over the financial year to date.
Next believes that strong sales in July pulled forward sales from August. Sales in September, meanwhile, were adversely affected by unusually warm weather, and the retailer saw significant improvement in October when temperatures fell, possibly recouping some of the lost sales in September, and setting a high bar which in unlikely to be upheld for the rest of the year.
In the year to date, full-price sales were up +3.5% YoY. Next has maintained its full-year profit guidance.
Steve Miley, a senior market analyst at www.asktraders.com, comments: "Whilst these are a solid set of results given the tough trading environment, investors were obviously holding out for more from the retailer. The share price dropped over -2% in early trade.
"Store sales falling -6.3% is a cause for concern – this is a significant decline, and one that investors are finding hard to digest. That said, the online figures prove that Next is evolving well, with a sophisticated online offering which will support the firm amid challenging trading conditions on the high street. Despite investors' disappointment, Next is adapting to industry change, and could still retain its crown as a retailer darling."
