Next maintains guidance despite lower Q3 sales

30th Sep 2014 07:08

Clothes retailer Next warned that third quarter sales were lower than its previous expectations and a continuation of the unseasonably warm weather could reduce full year profits.However, the FTSE 100 group was confident enough to maintain its full year guidance of £795m, saying "our experience suggests that some lost sales are regained when the weather turns".According to the Met Office, the weather is expected to be mixed over the coming week, with longer-term forecasts predicting fairly mild temperatures and a mix of dry and wet weather.In a statement released ahead of its biannual investor meetings this week, the company admitted that: "The overall effect is that quarter three sales to date are up 6%, which is lower than our previous forecast of +10%."As a result, while management insisted its current profit guidance for the full year remained at £795m, the continuation of milder weather could cut this by as much as £20m to a new "profit guidance range of £775m to £815m" if the warm weather continues for the full duration of October.Having enjoyed several "very strong" weeks in August thanks to the cooler weather driving more customers towards autumn and winter clothing, Next said the warmer weather in the more important sales month of September reversed this.Independent analyst Nick Bubb said Next was probably just being "unnecessarily cautious" ahead of their investor meetings but said the market could also read across to High Street fashion rivals like Marks & Spencer and Debenhams.Shares in Next were down 3.7% to 6,609.1p by 10:20 on Tuesday.