Shares in Next (LON:NXT) have fallen deep into the red in London this morning, as the company said that it had seen 'extremely volatile’ sales performance in the third quarter of its financial year. The blue-chip retailer, however, narrowed its full-year guidance.
As of 08:40 BST, Next’s share price had lost 5.96 percent to 4,627.50p, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed marginally into positive territory and currently standing 0.35 percent higher at 7,519.04 points. The group’s shares have lost nearly four percent of their value over the past year, and are down by some seven percent in the year-to-date.
Next announced in a statement this morning that its full-price sales in the third quarter had climbed 1.3 percent as compared with last year. Despite the rise, the retailer noted that week by week sales volatility made it “very hard to determine any underlying sales trend”.
“Sales performance has remained extremely volatile and is highly dependent on the seasonality of the weather,” Next further pointed out. Going forward, Next narrowed its full-year guidance, noting that it now expects to deliver profit before tax of between £692 million and £742 million, as compared with an earlier guidance of between £687 million and £747 million.
Analysts weigh in on update
“Next better hope that British shoppers are a little less fickle than the weather, because sales performance is so volatile the firm has no idea what to expect over the vital Christmas trading period,” Neil Wilson, senior market analyst at ETX Capital, commented, as quoted by The Telegraph. “This is a worry, although there does seem to an improving trend in sales growth throughout the year that may calm nervous investors.”