Why it’s interestingNext’s investors already knew what was coming after a January profit warning, but the retailer’s results show that the high street remains a tough place to operate for most of its inhabitants. The fashion store chain has predicted a 10 per cent annual decline in like-for-like sales, however, it is sticking to guidance despite warning of more trouble in the coming year. It predicts earnings per share to grow by another 3.6 per cent this year, while sales growth of 1.7 per cent will contrast with another marginal decline in profits of minus 1.1 per cent to £715m.
Chief executive Lord Simon Wolfson added that the government’s proposed tariffs regime after Brexit would save Next up to £15m on sourcing goods, a saving it would pass onto consumers. Adding that there is no evidence that Brexit uncertainty has hurt Next, he said: “Our feeling is that there is a level of fatigue around the subject that leaves consumers numb to the daily swings in the political debate.” Next's share price fell three per cent to 5,030p in early morning trading. Tom Stevenson, investment director from Fidelity Personal Investing’s share dealing service, said Next has done well in a difficult environment. “Next has shown that its blend of High Street presence and strong online offering is the only way to survive and thrive,” he said. “Wolfson is the sector’s most intelligent and thoughtful chief executive. He understood sooner than anyone the winds of change blowing through the high street and he has positioned Next for the challenges ahead. It won’t be a smooth flight but at least the pilot’s got his eyes wide open.”