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Next sales fall in run-up to Christmas Next warns on outlook as sales fall
(35 minutes later)
Retailer Next has said its sales fell in the run-up to Christmas Eve, despite expectations that they would rise. Next has warned that this year will be "challenging" as it reported a fall in sales in the run-up to Christmas.
The company said full-price sales fell by 0.4% in the 54 days to 24 December compared with the previous year. The retailer said full-price sales fell by 0.4% in the 54 days to 24 December, with annual profits now set to be at the low end of expectations.
It also said its profits for the year as a whole would be at the bottom end of expectations. The firm forecast full-year profits would be £792m, compared with previous guidance of £785m-£825m.
The firm forecast full-year profits would be £792m, compared with previous guidance of £785m-£825m. It added that the coming year would be "challenging". Next said sales in 2017 could be hit as rising inflation erodes earnings growth and squeezes consumer spending.
Next said sales in 2017 could be affected as rising inflation erodes earnings growth and puts a squeeze on consumer spending. Next shares fell by 12% at the start of trading in London.
It also said prices of clothing could rise "by no more than 5%" following the fall in the value of the pound last year. "The year ahead looks set to be another challenging year; therefore we are preparing the company for tougher times," the company said.
It said the price of clothing could rise "by no more than 5%" following the fall in the value of the pound last year. It added that this would "depress sales revenue by around 0.5%".
As a result, it said it was budgeting for full-price sales growth in the year to January 2018 within the range of a fall of 4.5% and a rise of 1.5%.As a result, it said it was budgeting for full-price sales growth in the year to January 2018 within the range of a fall of 4.5% and a rise of 1.5%.
If it came in at the mid-point of a fall of 1.5%, that would be "marginally worse" than the current year's performance, it added.If it came in at the mid-point of a fall of 1.5%, that would be "marginally worse" than the current year's performance, it added.
Next is already predicting a fall in profits for next year, saying it expects to make between £680m and £780m.Next is already predicting a fall in profits for next year, saying it expects to make between £680m and £780m.
However, the retailer said it was "well placed to weather a downturn in consumer demand".
The figures for the 54 days to Christmas Eve revealed sales in stores fell by 3.5%, while Next Directory sales rose by 5.1%.