Fashion retailer Next has reported a slowdown in UK sales, but stronger international growth has lifted its overall performance and improved its sales targets.
For the 13 weeks to October 31, total full-price sales rose by 8.1% compared with a year earlier, around £33 million ahead of guidance. This followed 7.7% growth in the first half of the current financial year.
UK sales ease amid warm weather
In the UK, quarterly sales growth eased to 2%, down from 3.6% in the previous six months. Online sales slowed to 4.4% for the quarter, compared with 7.4% in the first half, while retail sales declined by 1.7%.
Next said UK sales slowed “as expected” in recent months, describing the performance as “volatile” amid pressure on household budgets. The company also partly attributed the slowdown to untypically warm temperatures in September, which led to declining sales for significant parts of the month.
The Office for National Statistics (ONS) recently highlighted that sales volumes among fashion retailers declined in September, as weather conditions impacted demand for autumn and winter lines such as jackets and coats.
International growth drives improvement
This weakness was offset by the international business, where sales surged by 32.2%, surpassing forecasts of 20.5% growth. Next said it saw growth through direct sales and third-party aggregators after increasing its marketing investment.
As a result, the company now expects total group sales to be slightly stronger than previous forecasts. It is on track for total sales growth of 7.6% to £7.54 billion for the year to January, having previously guided towards a 6.9% increase to £7.49 billion.
Profits are still forecast to grow by 8.4% to £1.255 billion for the year, Next said.
