High Street retailer Next is expected to post the first fall in its annual profits since the financial crisis this week.
The company is likely to announce that pre-tax profits fell to about £792m when Next releases its results for the year to January 2017 on Thursday. This number could range between £785m and £799m depending on January trading, and will be down from £821.3m in the year to January 2016.
The company warned in January that its full-year results for 2017 and 2018 would be lower that expected, following a disappointing pre-Christmas period. Full-prices sales were down four per cent in November and the days leading up to 24 December.
Next chief executive Lord Wolfson, who supported the campaign to leave the EU, is likely to attribute the brand’s foundering performance to currency pressures and the erosion of real wage growth. Devaluation of the pound also led the retailer to warn in January that product prices could soon be pushed up by 5 per cent.
Caren Ngo Siew Teng, intelligence analyst at S&P Global, predicted that difficult conditions in the retail sector will continue to affect Next’s profits in the coming year, but also said that the company remains “well-managed and cash generative.”
Next’s current share price stands at 3877p, less than half the October 2015 high of 8000p. The price fell from almost 5000p when the company announced its profit warning in January of this year.