Fashion retailer Next has reported better-than-expected stores sales but warns that the figures should be treated with caution. Like-for-like store sales in the 14 weeks to 2 May were 2.3% lower than last year, ahead of Next’s own estimates of a decline of 6% to 9%. The sales performance meant Next added £15m to its profit forecasts. But it said the figures were flattered by a late Easter, warmer weather and fewer people taking overseas holidays. It added that it expected sales for the first half of the financial year to fall by between 4% and 7%.
Next expects the second quarter will be weaker than the first as comparative figures are more challenging. Last year the second quarter was much better than the first.The Company is now forecasting that Next Retail like for like sales in the first half will be within the range of -4% to -7% and that Next Directory sales will be broadly flat. These estimates do not factor in any effects of a possible flu pandemic.
The company stated it is ” happy with the positioning and composition of our ranges. Stock levels are in line with our expectations and below last year’s levels.”
As a result of the better than expected sales to date Next added £15m to its internal profit forecasts. However, these improvements could yet be offset by the effects of pandemic flu, although at this stage it is hard to predict the impact on consumer behaviour.
Image: Next SS09 campaign