Next sales drop again as directory continues to outperform stores

Caitlin Morrison
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Did Theresa May's holiday dress of choice help Next? (Source: Getty)

Next has reported a drop in sales in the second quarter, although directory showed a strong performance.

The figures

The retailer said full price sales were up 0.7 per cent compared to the same period of last year. However in the year to date, sales were down 1.2 per cent.

A breakdown of sales showed retail sales dipped 7.4 per cent in the quarter to 29 July, offset by an 11.4 per cent increase for directory.

Total sales, including markdown sales, were down 2.1 per cent in the second quarter, and down 2.3 per cent in the first half, Next said.

Shares in the retailer were up 8.5 per cent in early trading.

Why it's interesting

In May, Next trimmed its full year guidance in response to lacklustre sales, forecasting profit for the year to fall by 6.4 per cent to £740m.

However, today's figures show sales were still ahead of analyst expectations of an 8.8 per cent for retail.

Today, the company said: "In the current consumer environment we remain cautious and are budgeting for second half full price sales to be down 1.2 per cent, which is in line with our performance in the first half."

Next said it plans to pay its third special dividend of 45p this year on 1 November.

What Next said

"During the second quarter June and July sales have been better than expected," the group said.

"We believe there has been some improvement in our product ranges and our online functionality during this period. However, we believe most of the increase in full price sales is due to the much warmer weather and, to a lesser degree, lower markdown sales in the end-of-season sale."

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