Fashion retail chain Next’s worse-than-expected Christmas season performance has prompted it to warn over sales and profits as it braces for "tougher times" in 2017.
The high street giant this morning said in the 54 days to December 24, sales dipped by 0.4 per cent and it recorded a seven per cent plunge in end-of-season clearance sales – defying hopes of a fourth quarter turnaround.
Next said profits for the year to January 2017 were forecast to fall by around 3.6 per cent and sales trading woes were expected to deepen in 2017, with profits potentially dropping by as much as 14 per cent for the year to January 2018.
The retailer also reiterated warnings over cost pressures from the weakened sterling in light of the EU referendum, with potential price rises of up to five per cent.
The company – led by pro-Brexit chief executive Lord Wolfson – had been hoping for a fourth quarter rise in sales after a difficult 2016, but the lacklustre end-of-year performance meant profits were expected to come in at £792 million for the 12 months to January 2017 – a 3.6 per cent dip year-on-year – but this depended on January trade.
"The year ahead looks set to be another challenging year; therefore we are preparing the company for tougher times,” the retailer said in a statement.