High street fashion chain Next is remaining cautious on the year ahead, despite recording annual sales of nearly £4bn for the first time since it was founded in 1982.
The retail giant reported a 12.5% rise in annual profit, boosted by sales growth at both its stores and directory internet business. Lord Wolfson, Chief Executive, recognised a brighter economic and consumer backdrop but advised that some of Next’s collections were not performing as well as they were in the same period last year.
“The economic outlook for the UK consumer looks benign. Low price inflation, an end to real wage decline, healthy credit markets and strong employment all paint a more positive picture than in recent years,” Lord Wolfson commented.
“Although the consumer economy looks benign, we remain very cautious in our sales budgets. Whilst we are happy with most of our current product ranges, we recognise that some collections are not as strong as they were at this point last year.
In addition, during the Spring and Summer seasons, we face very tough comparative numbers from last year, when sales were assisted by unusually warm weather.”
The British chain trades from over 500 stores in the UK, and nearly 200 stores overseas. Resisting optimism, Next drove its shares 6% lower in early trading to £71.70, marking it as the FTSE 100’s biggest faller.
The company said it expects sales to increase by between 1.5% and 5.5% in the year ahead, with pre-tax profit predicted to rise by between 0.4% and 6.7%.