Next pre­tax prof­its fall by 9.5%

The Irish Times - Business - - MARKETS -

Retail chain Next has de­liv­ered a “mod­est” up­grade to its full-year out­look af­ter an “en­cour­ag­ing” per­for­mance amid tough high-street con­di­tions.

The fash­ion group posted a 9.5 per cent fall in pre­tax prof­its to £309.4 mil­lion (€348.2 mil­lion) for the six months to the end of July af­ter to­tal sales across its high-street stores, in­clud­ing mark­downs, fell by 8.3 per cent.

But chief ex­ec­u­tive Lord Wolf­son said that, while it was a chal­leng­ing first half, im­proved trad­ing in the sec­ond quar­ter sug­gested ef­forts to over­haul its ranges were be­gin­ning to pay off.

He said the worst of the Brexit-fu­elled price rises on the high street were also over.

A prom­i­nent Leave cam­paigner, Lord Wolf­son said 2018 would see an end to price rises, with the group pre­dict­ing sta­ble prices in the au­tumn.

Ster­ling boost

Lord Wolf­son added that the ben­e­fit of the weak pound will start to be felt next year as it boosted ex­ports.

“The bad news will be this year and the good news next year,” he said.

Next is fore­cast­ing full-year prof­its of about £717 mil­lion, up from £710 mil­lion pre­vi­ously, al­though this would still mark a drop on the year be­fore.

It said sales could fall by up to 2 per cent or rise by 1.5 per cent over the year, hav­ing pre­vi­ously warned of a fall of up to 3 per cent.

Lord Wolf­son said: “The first half of the year has been dif­fi­cult and sales and prof­its are in line with our cau­tious ex­pec­ta­tions. How­ever, our per­for­mance in the last three months has been en­cour­ag­ing on a num­ber of fronts and, whilst the retail en­vi­ron­ment re­mains tough, our prospects go­ing for­ward ap­pear some­what less chal­leng­ing than they did six months ago.”

Next has been helped by the warmer weather in the sum­mer, to­gether with an over­haul of its prod­uct ranges and on­line of­fer­ing, which helped to­tal full-price sales rise by a bet­ter-than-ex­pected 0.7 per cent in its sec­ond quar­ter to July 29th.

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