24th March 2016
Shares in Next tumbled in early trading on Thursday after the retailer reported that its annual pre-tax profits had risen to £836.1m.
Its latest results are up from £794.8m year earlier.
In the year to 30 January, sales for Next Directory, its online and catalogue business, increased by 8% and Next Retail by 1%. Total Group sales rose by 3% to £4.1bn for the period.
However by 8:58am stock in the group had fallen by 9% to 6092.83p.
In a statement the group said “2016 will be a challenging year with much uncertainty in the global economy”.
It added: “For Next it makes it particularly important that we remain focussed on our core strategy of delivering long term sustainable growth in EPS, investing in the business, improving the design and quality of our products and returning surplus cash to shareholders.”
However the high street stalwart also downgraded its sales expectations for the coming financial year. While it had originally been anticipating growth of circa between 1% and 6%, it now predicted it would be between minus 1% to plus 4% – with a mid-point of plus 1.5%
It said: “The year ahead may well be the toughest we have faced since 2008. We are very clear on our priorities going forward and whatever challenges we may face, it is important that we remain focused on ensuring that the company’s product, marketing, services and cost controls all improve in the year ahead.”
Notably the group said that sales in its directory division had been easing. “Partly this is as a result of competitors catching up with our delivery and warehousing capabilities; partly as a result of changes in the ways customers are shopping online,” it added.