Shares in Next (LON:NXT) have fallen deep into the red in today’s session, even as the blue-chip retailer posted a rise in sales for the 26 weeks to July 28, having benefitted from a hot weather spell across the UK. Despite the upbeat performance, the blue-chip retailer maintained its full-year guidance.
As of 12:15 BST, Next’s share price had given up 7.11 percent to 5,514.00p. The decline is weighing on the benchmark FTSE 100 index which currently stands 1.30 percent in the red at 7,647.85 points. The group’s shares have added more than 41 percent to their value over the past year, as compared with about a three-percent gain in the Footsie.
Next reports quarterly results
Next announced in a statement today that its full-price sales had climbed 4.5 percent in the 26 weeks to July 28, helped by a 15.5-percent rise in the group’s online segment, which helped offset a 5.3-percent decline in retail sales. While the group noted that its 2.8-percent rise in second-quarter sales was ahead of its guidance, it attributed the overachievement “to the prolonged period of exceptionally warm weather, which greatly assisted the sales of summer weight product”.
“It is almost certain that some of these sales have been pulled forward from August,” Next pointed out, adding that it was maintaining its sales and profit guidance for the year to January 2019.
Analysts weigh in on update
“The quarter’s performance is explained almost entirely by glorious weather, which the company is certain will have brought forward many August purchases,” said Mike van Dulken, head of research at Accendo Markets, commented, as quoted by Proactive Investors, adding that this implied that the third quarter “could see another sequential slowing of growth into the key Autumn/Winter season”.