Next’s profits predicted to drop 4%

Next is poised to report a fall in full-year profits next week, as changing spending habits clothing and footwear takes its toll on sales.

Often regarded as one of the bellwethers of UK retail, the high street giant is expected to reveal a four per cent slide in annual pre-tax profits to £792 million, down from £821.3 million last year.

In January, the retailer predicted overall full-price sales to dip by one per cent after tough trading during Christmas led to a 0.4 per cent fall in the quarter to December 24.

Next chief executive and pro-Brexit campaigner Lord Simon Wolfson also previously warned that the cost pressures derived from the decline in the sterling could see the retailer raise prices by up to five per cent.

READ MORE: Next boss demands more transparency over Brexit

He also predicted 2017 would be “even tougher” for Next and that 2018’s profits would drop to between £680 million and £780 million.

Graham Spooner, investment research analyst at The Share Centre, said: “The market will be hoping for better news from clothing retailer Next following its fourth quarter trading update in early January which showed Christmas sales at high street stores below expectations.

“A major issue for the group is the increase in import costs due to the weak pound and investors are keen to see if that is going to be passed on to customers or absorbed by the company.”

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