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Next Cuts Full-Year Forecast as Quarterly Sales Miss Estimates

Next Plc, the U.K.’s second-largest clothing retailer, cut its full-year forecasts as an extended period of unseasonably warm weather led shoppers to delay updating their wardrobes.
Next Winter 2014 | Source: Next
By
  • Bloomberg

STOCKHOLM, Sweden — Next Plc, the U.K.'s second-largest clothing retailer, cut its full-year forecasts as an extended period of unseasonably warm weather led shoppers to delay updating their wardrobes.

Pretax profit for the year ending in January will range from 750 million pounds ($1.2 billion) to 790 million pounds, compared with a previous forecast of 775 million pounds to 815 million pounds, the Leicester, England-based company said today in a statement. Sales are anticipated to increase by between 6 percent and 8 percent, compared with a previous range of between 7 percent and 10 percent.

“Whilst a cool August meant that the season started well, this was more than offset by much weaker sales in September and October,” the retailer said in the statement.

Next, with more than 500 stores across the U.K. and Ireland, said last month that mild weather might endanger its profit forecast. Since then, temperatures have remained above the average for the time of year, with parts of southern England almost reaching 20 degrees Celsius this week.

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“The weather did stay remarkably mild in October, spelling bad news for full-margin sales of coats, jumpers and scarves,” Nick Bubb, an independent analyst, said by e-mail. “It certainly wasn’t a wipe-out, but some damage was done.”

Total sales, excluding value-added taxes, rose 5.4 percent in the 13 weeks to Oct. 25, Next said. The median of 14 analyst estimates compiled by Bloomberg was for a 7 percent gain.

By: Katarina Gustafsson; editors: Celeste Perri and Paul Jarvis.
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