Next gave an early warning to the City that fashion sales figures across the high street could be hit this autumn thanks to the driest September on record.
The fashion retailer said the warm month has seen sales grow by just 6 per cent compared with an expected 10 per cent and warned it would have to adjust its profit guidance if the unseasonal weather continued throughout October.
The unscheduled announcement took the City by surprise and sent its shares plummeting nearly 4 per cent, to 6,605p, with rivals Marks & Spencer, Debenhams, SuperGroup and Asos falling as investors braced for a slew of similar warnings.
Next said it decided to reveal the drop in sales because bosses were due to hold biannual meetings with investors this week and wanted to pre-empt inevitable questions from shareholders over current trade.
It said: “Given the recent spell of unseasonably warm weather it is inevitable that shareholders will enquire about current trade.
“Cooler weather in August resulted in several very strong weeks, However, warmer weather in the more important month of September has had the reverse effect.”
The company, one of the biggest high street fashion success stories of recent years, constantly beating its rivals, has seen its shares rise 24 per cent so far this year and plans a special dividend.
However, it added: “If this unusually warm weather continues for the full duration of October then we are likely to lower our full-year profit guidance range of £775m to £815m.”
Some analysts suggested the announcement was a sign of cautioun from the company and said it was unlikely to make any lasting impact on the retailer.
Nick Bubb, an independent retail analyst, said: “Next is probably being unnecessarily cautious, ahead of investor meetings this week, but the market is unlikely to take any chances.”
Next has managed to distinguish itself from rivals with its successful Directory catalogue, while competitor Marks & Spencer has suffered from a website relaunch which sent sales down initially.
The company has also steered clear of last-minute sales or flash sales, unlike Debenhams which is currently holding discount weekends. M&S shares lost 10.8p to 404.6p and Debenhams was down 1.55p at 58.3p.Reuse content