Next issues profits warning after “tough” Christmas

Next, the Enderby-based retail giant is reporting disappointing Christmas trading results this morning (4 January) and has issued a profit warning.

The firm said that sales for the 54 days from 1 November to 24 December were down 0.4% on 2015 – a year which is described as “poor”.

Sales for the full year, excluding sales, are down 1.1%. End of season sales were down 7% on last year.

Next has revised its central profits guidance to £792m, although this may increase of decrease by £7m depending on January sales. In a worst case scenario, this could mean a profits drop of some 14%.

A statement from the firm read: “The year ahead looks set to be another challenging year; therefore we are preparing the Company for tougher times and have set our full price sales budget accordingly.”

Next says that the National Living Wage, the national business rates revaluation, Apprenticeship Levy and energy taxes will add around £13m to its cost base. General inflation in wages and other non-product costs look set to increase by an additional £6m. Next says it will also invest around £10m in its website and online marketing.

Next will announce its results for the full year on Thursday 23 March.