Next’s half-year financial update has shown a dip in profits, raising further concerns the fashion retailer could increase prices next year.
The company’s pre-tax profits slid by 1.5 per cent to £342.1 million for the half year to July, after what was a difficult year so far.
The retailer’s profit after tax also fell from £277 million to £273.5 million.
While total brand sales were up three per cent to £1.9 billion year-on-year, full price sales were down 3.2 per cent.
However, directory sales spiked by 7.1 per cent to £821.2 million, and retail sales also went up by a small 0.1 per cent to £1.9 billion.
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Next’s total group sales also increased by 2.6 per cent to £1.96 billion, and new space helped contribute 2.8 per cent to growth.
The retailer said unseasonably warm weather during winter last year and a cold spring saw clothing and footwear sales fall “dramatically” below the broader trend of consumer spending.
Next also said in August that it expected cost prices to jump five per cent next year thanks to the devaluation of the sterling following the UK’s Brexit referendum.
“As expected, it has been a challenging year so far, with economic and cyclical factors working against us, and it looks set to remain that way until mid-October at the earliest,” Next chief executive Lord Wolfson said.
“There has been some talk of a general retail bounce in July and whilst Next did enjoy very strong sales in July, this was driven by a much larger end-of-season sale.
“Full price sales in July remained subdued, so we do not believe that July trading represented any change in underlying consumer spending patterns.”