Next cautions on 2012-13 profits due to euro zone crisis
Sales at Next's over 500 stores in the UK and Ireland fell 2.7 percent
By CFOWorld.co.uk | CFO UK | Published 10:07, 04 January 12
"My sense is the underlying economic situation is slightly worse than it was in September and that the only thing that's really changed is the situation in Europe," he told Reuters in an interview.
Shares in Next fell nearly 4 percent on Wednesday after the No. 2 clothing retailer in the UK said it would meet profit forecasts for the year to end-January 2012 - guiding to a figure £7 million either side of £565 million - but expressed concern about the outlook for the following year.
"Our internal budgets for the year ahead show modest growth in overall Next brand sales with profit before tax only slightly up on this year," it said on Wednesday.
Wolfson, a prominent supporter of the ruling Conservative Party who sits in the House of Lords, said the crisis had put the brakes on employment growth and affected consumer sentiment, business confidence and the banking sector.
Kicking off the post-Christmas UK retail reporting season Next, which has a long standing policy of never going on sale before Christmas, said total sales, excluding VAT sales tax, rose 3.1 percent year-on-year in the 1 August to 24 December period.
Sales at its over 500 stores in the UK and Ireland fell 2.7 percent. But this was offset by a 16.9 percent leap in sales at its home shopping service Next Directory.
Next said it was disappointed with sales in November and December as macro headwinds and high levels of competitor discounting took their toll.
Wolfson said rivals discounting was "more than I've ever seen before".
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