- Next third-quarter sales up 1.3%, lower than some in the City had hoped.
- Retailer warns sales remain “extremely volatile.”
- Stock falls 8% at the open, before recovering slightly.
LONDON — Shares in High Street fashion chain Next collapsed over 8% on Wednesday morning on the back of a poorly received trading update.
Next reported third-quarter sales up 1.3% with most of that coming from new store openings, suggesting its core business is stagnating. Sales were held up by Next Directory, the chain’s catalogue business.
Nick Bubb, an independent retail analyst, said in an email on Wednesday morning: “Some people in the City expected full-price sales to be nearly 4.5% up in Q3, driven by Next Directory, but the outcome was only +1.3%, with Next Retail down a sickening 7.7% and Next Directory up 13.2%.”
Next has already put out a profit warning this year and kept its guidance for full-year profits and sales unchanged. But it warned that sales are “extremely volatile and highly dependent on the seasonality of the weather.”
Neil Wilson, a senior market analyst at ETX Capital, said: “Sales performance is so volatile the firm has no idea what to expect over the vital Christmas trading period. This is a worry.”
Next’s share price dropped over 8% at the open in London. The stock has recovered slightly since then and, at 8.35 a.m. GMT (4.35 a.m. ET), Next is down close to 7.5%: