British apparel retailer Next (NXT.L) lowered its central projection for full year profit early on Thursday citing lower than expected retail sales during the penultimate month of the year which were offset by better-than-forecast online sales.
The clothing company, which specializes in office-ware, said that strong sales in the three weeks prior to Christmas along with a good half-term holiday week at the end of October made up for what it described as “disappointing” sales in November.
Whilst total full price sales were in line with the company’s expectations for both the Christmas trading period and the year to December 29, Next reported that its retail sales were 16 million pounds ($20.1 million), or 1.7%, below its expectations, while online sales including interest income were 17 million pounds, or 2.2%, ahead of its projections.
For the full year, the company is now targeting full price sales growth of 3.2%, in line with the guidance that it gave in September. Next’s central guidance for full year profit is now 723 million pounds, 0.6% lower than its previous guidance of 727 million pounds. It said that the 4 million pounds difference was a result of higher sales on seasonal products and higher operational costs.
The higher sales on seasonal products, such as personalized gifts and beauty products, reduced margin by 1.5 million pounds, it said, while the remaining 2.5 million pounds reduction was the result of increased operational costs associated with the higher online sales.
Next’s central guidance for earnings per share is now 435.2 pence, an increase of 4.4% on the previous year.
The company is scheduled to announce its results for the full year ending January 2019 on March 21.