Next warns on profits following mild weather
High street giant Next has reduced its full year central profit expectations by £25m after unseasonably warm weather in September and October impacted its sales growth. The news comes weeks after the listed group reported a "good first half" for the six months to July.
An interim management statement for the quarter to 25 October 2014 revealed that sales had increased by 5.4 per cent in the third quarter of 2014, well below the company's expectation of more than 10 per cent.
The retailer said its central profit guidance should be 3 per cent lower at £770m – down from £795m – with a new profit range of £750m to £790m reflecting a growth of between 8 per cent and 14 per cent.
Its final quarter forecasts were also lowered, due to "volatility" of current trading. It is now expecting sales to be within a range of -2 per cent and +4 per cent, compared with a previous forecast of 4 per cent growth.
The retailer, which is headquartered in Enderby, Leicestershire, said a cooler than normal August had led to a good start but mild weather in September and October had impacted sales.
In September, Next reported it would pay shareholders a multimillion-pound dividend following a "good first half" for the group.
On 11 September, it posted revenues of £1.84bn for the six months to July 2014, up from £1.67bn for the same period in 2013. As a result of the performance, Next returned £233m to shareholders through three special dividends, of which two were paid in the first half.
Next will issue another sales update for the period to 24 December 2014 on 30 December.