Festive sales

Next likely to report squeeze on Christmas trading

Next
Next is likely to show a dip in Q4 sales (pic: Terry Murden)

Fashion clothing and interiors chain Next is expected to show the impact of squeezed Christmas spending when it updates the market this week.

Chief executive Lord Wolfson has already predicted that shoppers were likely to rein in their spending. In August the company downgraded full-price sales and profit expectations for the year.

Next is traditionally the last major retailer to go live with its year-end sales but analysts at AJ Bell note that the markdowns went live on Christmas Eve this year.

This suggests that the FTSE 100 firm “has not proved immune to the challenges posed by inflation, uncooperative weather and the squeeze put on consumers’ pockets by the cost-of-living crisis”.

The retailer produced its third-quarter sales update in November which indicated a 2% year-on-year drop in full-price sales in the fourth quarter and 4.8% growth for the year overall. 

AJ Bell is anticipating pre-tax profit of £840 million, a 2% advance on last year’s £822m.

It says it is unlikely that Next will discuss its dividend for 2022 or buyback policy for 2023 on Thursday. These issues are likely to be left to the full-year results in late March, it says, although analysts are looking for a final payment of 131p a share, to take the full-year total to 197p, following the 66p interim distribution.

The numbers will follow data showing footfall on Britain’s high streets and shopping centres plunged by more than a quarter in the week after Christmas compared with the week before.

Footfall was 27.7% lower than the previous week and 19.7% down on the same week in 2019, retail data analysts Springboard said.



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