Next shares lost over six per cent of their value after the company said the trading outlook was tough and second half sales had so far been disappointing.
Investors showed the retailer little mercy, despite first half results coming in ahead of some analysts' expectations.
The company said revenue was up 4.8% to £1.64bn during the period and profits were up 10.2% to £251m, driven by online retailing and new stores opening.
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However, Next said it had seen disappointing sales in August and early September and remained cautious on the outlook.
Matthew McEachran from Singer Equity Research said the unusually quiet period could only partly be blamed on the Olympics.
He recommends investors switch to Debenhams shares.
"[Next is] maintaining full year guidance and our forecasts, which are towards the upper end of their range of scenarios, are unlikely to change," McEarchran said.
"Given the rating is close to its 10 year high, the stock may drop back in the absence of upgrades."
Henry Carver at Peel Hunt said lower margins had dented profits but maintained a 'hold' rating.
"The outlook remains tough - we're downgrading fully year 2013 EBITA [earnings before interest, tax and amortisation] by a further 5% (having downgraded 5% at the first quarters in June) and reducing our price target to 170p from 180p," he said.
Profits at company's retail arm crept ahead by 0.2% to £122.7m, which included a fall in like-for-like sales of £18m. New profitable space added £14m.
However, its online Next Directory saw sales jump 13.3% to £551.7m, boosting profits by £26m.
Earnings per share were up 18.7% and rose faster than profit, mainly as a result of continued share buybacks and lower tax rates.
Next increased its interim dividend by 12.7% to 31p and said it expected to increase the full year amount broadly in line with its growth in underlying earnings per share.
Shares were down 6.5% at 11.15am on Thursday following the announcement.
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