UK retailer warns that trading is ‘extremely volatile’ after its sales figures falls short of City expectations
- Introduction: Next warns of ‘extremely volatile’ trading
- Shares drop almost 8% in early trading
- Coming up: How did UK factories perform last month?
Shares in Next have tumbled by almost 8% at the start of trading.
They’ve slumped to the bottom of the FTSE 100 leaderboard, down 368p at £45.52.
UK high street retailer Next has spooked the City by missing its sales forecasts and warning that trading is “extremely volatile”.
Next, one of the country’s key retailers, has reported that sales at its stores shrank by 7.7% in the three months to 29th October.
Ouch!#Next third quarter retail sales fall 7.7%, compared to estimates of a 3.7% decline
Sales performance has remained extremely volatile and is highly dependent on the seasonality of the weather.
In August and September sales were significantly up on last year, as cooler temperatures improved sales of warmer weight stock. The change in sales trend came at precisely the same time UK temperatures became warmer than last year.
Week by week sales volatility makes it very hard to determine any underlying sales trend. We believe the most reliable guide to sales for the balance of the year are the full price sales for the year to date, which are down -0.3%.
Next: 13.2% rise in Directory sales masks 7.7% fall in Retail sales Q3 – autumn arrived early in store as well as across the country pic.twitter.com/LHXLsW6aJn
Despite a terrible October, Next have maintained their central profit guidance for the full year
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Earlier in the day investors will want to pay attention to the Manufacturing PMI release from the UK which comes a day before tomorrow’s Bank of England meeting on monetary policy.
The pound has gained considerably over the past two days as expectations are set for the BoE to hike rates this month and today’s PMI release could set the stage for more gains.
There was a loss of momentum generally last month in many of the activity sub-components of these surveys but the manufacturing sector is looking the most buoyant.