Next expected to prove its resilience over Christmas trading

Bellwether retailer Next will be the first FTSE100 business to update the market on its Christmas trading on 3 January and analysts are expecting a more upbeat message than the one which sent its shares tumbling 12 months ago.

Last year the business revealed that Q4 sales had been down -0.4% on the prior year, when it had been expected to post a marginal improvement. The news sent its share price tumbling and it took eight months for it to recover. However The Times has pointed out that Next's shares edged up yesterday (closing up 122p at £44.15), suggesting the city is expecting a decent performance.

Analsyts told the newspaper that the impact of the slump in Sterling's value following the Brexit vote of 2016 should be less severe – the retailer had said that it was being forced to increase prices to mitigate the increased costs – and that taking part in Black Friday (albeit tentatively) for the first time ever in November should have helped lift sales and should lead to a reduction in its Boxing Day clearance rates.

“Currency should turn from a big margin headwind to a small tailwind in 2018 whilst strong cash conversion should allow continuation of recently-restarted buybacks,” The Times reports Deutsche Bank's notes to its clients. “As a well-run company with high margins relative to peers, and a good channel mix, albeit difficult geographic mix, Next should prove relatively resilient in the face of an uncertain consumer.”