Next affected by 'volatile' trading in third quarter

High Street fashion and homewares retailer Next said that its sales performance was 'volatile' in the third quarter with stronger sales in late September and early October offsetting an unusually quiet start to August.

The group had already flagged in its interim results that sales at the start of the third quarter had been "disappointing".

When excluding VAT, Next Retail sales rose by 1.1% in the three-month period, Directory sales increased by 5.6% and Brand sales were 2.7% higher. Sales growth in Retail had accelerated from the first half (H1: +0.2%), but slowed down in Directory (H!: +13.3%) and Brand (H1: +4.5%).

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Year-to-date sale growth in Retail, Directory and Brand was 0.5%, 10.4% and 3.8%.

The company said: "Overall sales performance remains volatile, making it hard to draw conclusions from any one short period of time. We expect total sales in the final quarter to increase broadly in line with sales for the year-to-date. Accordingly we are narrowing our full year sales guidance to a range of +3.0% to +4.5%."

This narrower sales guidance and a clearer outlook on costs has enabled Next to give a more precise profit range.

The firm now expects group pre-tax profit to be in the range £590-620m, compared with the previous guidance of £575-620m. This represents full-year growth of 3.5-8.7%.

Growth in basic earnings per share on last year's 255.4p is now forecast to be 10-15%.