Next has edged higher ahead of a trading update due on Tuesday, despite reports that full-price sales were up only 1% in the final quarter.
It is 5p better at £65.65, and retail analyst Nick Bubb commented:
Back on October 29, Next set a cautious tone for its key Xmas trading performance, by flagging that, given the volatility of autumn trading and the very strong Christmas performance last year, it had edged down its expectations for the fourth quarter this year.
Ahead of tomorrow’s trading update, Next was budgeting for “full-price” sales in fourth quarter to be within a range of -2% to +4%, with the central profit forecast for the year ending January of £770m pretax profit based on fourth quarter sales of only +1% (versus +11.9% for the period from November 1 to December 24 in 2013).
Just like last year, Next deserve considerable credit for holding the line on “full-price retailing” before Boxing Day, but the fear is again that it will have lost business to struggling High Street competitors in the short term. However, a year ago chief executive Simon Wolfson was able to say that the apparent discounting frenzy pre-Xmas on the High Street did not hurt trade, as consumers responded to the improved seasonal gift range and the excellent pre-Xmas delivery options for Next Directory/Online. A year on, with Next’s competitive advantage in Online order delivery somewhat reduced, it will be very interesting to see how things turned out.
Still with retail, and Asos is down 33p or just over 1% to £25.50 after the fashion retailer was unable to handle online orders for several hours on Sunday - one of the busiest post-Christmas trading days - after technical problems.
