Between 1 November and 24 December, the firm’s full price sales were down 0.4%, dragging its total year-to-date total down to -1.1%. Growth from the brand’s home shopping catalogue and online shopping services (5.1% in the fourth quarter) was severely undercut by flagging sales in its retail branches (Q4: -3.5%).
The end-of-season sales also fell flatter than anticipated, coming in at 7% lower than the year prior.
In an attempt to assuage investors, Next said it would be returning £250m worth of surplus cash to shareholders in the form of four quarterly special dividends.
But the “UK retail market is only going to get tougher,” says The Share Centre investment research analyst Helal Miah, who was less than encouraged by management’s forward guidance and the group’s fourth quarter performance.
“The tough conditions on the British high street have been reflected in the latest results from Next plc, a bellwether for the clothing industry,” he said. “Our view is that the trading conditions are not likely to improve anytime soon with the only good news coming from growing online sales and good translated earnings from international operations.”
For the time being, Miah said he continues to recommend the stock as a medium risk ‘hold’ for “investors looking for a balanced return.”
