High street giant Next raised its full-year profit hopes today but disappointed investors with a worse-than-expected performance from its powerhouse online business.
The fashion and homewares chain, which has around 540 stores, said sales through its website Next Directory increased 5.6 per cent in the quarter to 27 October, against City expectations of 10 per cent and 13.3 per cent growth in the first half of the year.
However, retail store sales grew 1.1 per cent in the period, up from 0.2 per cent in the first 26 weeks of its financial year. Next does not offer like-for-like figures.
The group said the gap between stores and the website had narrowed as delivery improvements at the start of last year started to drop out of comparisons but this failed to reassure investors as shares fell more than 1 per cent.
Next narrowed its annual pre-tax profit guidance to between £590 million and £620m, from £575m to £620m in light of the further growth but warned the overall sales performance “remains volatile”.
Panmure Gordon analyst Philip Dorgan said: “We see today’s statement as further evidence of a more benign environment for clothing retailers and our increasingly positive view of near term influences on UK household post-tax discretionary income.”
Retail figures for September revealed a surge in sales in warmer clothing and back-to-school attire, which is thought to have helped Next’s figures.
Next, which has been helped by new space offsetting lower sales from shops open more than a year, recently reported a 10 per cent rise in pre-tax profits to £251m in the six months to 31 July.