Wet spring expected to dampen Next results

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The Independent Online

Fashion retailer Next is expected to show a sudden drop in sales growth when it posts first-quarter numbers this week.

Fashion retailer Next is expected to show a sudden drop in sales growth when it posts first-quarter numbers this week.

Analysts believe the dismal weather will have caused trading to tail off as the quarter progressed. In the first few weeks of the year, underlying sales growth came in at 3 per cent, but the City predicts that will have slowed since, with most observers looking for flat growth.

Said one analyst: "It's almost inevitable because the weather's been so poor. The other factor is the rapid expansion programme, which is undoubtedly deflecting sales from the existing estate."

Another analyst said that profit takers might use this latest opportunity to get out. The stock, which started the year just over 1,100p, hit a high of 1,440p late last month.

Weather plays a big role in fashion retailing. Too hot, too cold or - as in recent weeks - too wet, and shoppers stay home. Disappointing summers or warm winters can also leave retailers with excess stock.

Investec economist David Page said: "Overall expenditure seems to be holding up and is one reason the Bank of England increased rates. But we are also hearing from retailers that the weather is doing no one any favours.

"At this time of year, retailers gear up for people buying new clothes for summer, and if the weather isn't good, that can put pressure on margins."

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