Disappointing First Quarter For Next As Sales Plunge 8.1%

Disappointing First Quarter For Next As Sales Plunge 8.1%

Retail giant Next revealed that high street sales plunged by 8.1% in its first quarter and cut its profit outlook once again as it warned that trading would remain under pressure.

The worse-than-expected performance over the 13 weeks to April 29 came despite a boost from the later, warmer Easter this year, although Next said its Directory arm performed better, with sales up 3.3%. This left total full-price sales 3% lower.

Next cut the top end of its profit guidance after the disappointing first quarter, with full-year profits now expected to fall by between 13.9% and 6.4%.

Chief executive Lord Wolfson said the group was still battling to recover from mistakes made last year with its product ranges, while consumer confidence has also been hit as rising prices puts households under pressure.

He said: "There's general pressure on the high street but the omissions in our own range are hitting our sales over and above any downturn."

Lord Wolfson said he was expecting "more of the same" in the group's second quarter, as it also comes up against tougher comparatives from a year earlier.

"The clothing sector is not an easy sector and we recognised in our full-year results announcement in March that some of our ranges weren't where we wanted them to be," he said.

The group admitted in March that its lines were missing the wardrobe staples Next is renowned for, such as easy-to-wear work blouses in a number of colours.

It has since overhauled its ranges, but stressed the full impact of changes will not be seen for some months.

"We said that we expected some improvements from May onwards, but that our ranges would not be where we wanted them to be until the autumn season in September. We still believe this to be the case," Next said on Thursday.

Next posted its first fall in annual profits for eight years in March, reporting a 3.8% fall in underlying pre-tax profits to £790.2 million for the year to January.

Its annual report last month revealed that Lord Wolfson saw his total pay packet plummet by more than 55% to £1.8 million after the dire year.

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