By mid-morning, the retailer’s shares had rebounded slightly and were down 10% at 4295.5p, but this still marked their lowest trading point within a year.
Chief executive Lord Wolfson lamented that a weaker pound and rising inflation would continue to depress sales revenue and maintain the cyclical slow-down in retail spending.
He said: “The fact that sales continued to decline in quarter four, beyond the anniversary of the start of the slowdown in November 2015, means that we expect the cyclical slow-down in spending on clothing and footwear to continue into next year.”
As such, the group anticipated full-year profits before tax for would only amount to £792m, putting it at the lower end of its previous guidance and 3.6% lower than the previous year’s figure.
For the next financial year, the British retailer forecasted that pre-tax profit could fall anywhere between £680m and £780m and total sales could be as low as -4.5% at constant currency.
Chief trader at Ayondo Markets Jordan Hiscott said: “The technical profit warning from Next sums up an absolutely disastrous update from the retailer, littered with negative guidance. Unsurprisingly, shares have moved in a disorderly fashion to a recent low of 4090p. To put this into perspective, shares for the high street retailer have dropped almost 50% from the high of 8175p made in December 2015.”
Next was forced to revise its profits guidance after being rocked by a “difficult” winter season where fourth quarter sales failed to surpass the previous year’s “poor” numbers.
