Next posts -1.2% drop in quarterly full price sales

High street giant Next has posted a -1.2% drop in full-price sales in Q2; a performance that was in line with its own expectations and better than some analysts had predicted.

In the three months to 29 July the business saw full price retail sales drop by -7.7% (they had dropped by -8.1% in the prior quarter) while Directory sales grew by 7.4% leading to a total brand full-price sales drop of -1.2%. In the prior quarter total brand full-price sales were down -3%.

Next said it had gone into its end of season sale in July with -5% less stock and markdown sales were down by -14%. As a result statutory total sales, including markdown sales, were down -2.1% in the quarter and down -2.3% in the first half.

However the business said that statutory total sales were understated as a result of a delay in the timing of Directory end-of-season Sale despatches. Adjusting for this distortion, it said underlying total sales in the second quarter were down -1.6% and down -2.0% in the first half.

"In the current consumer environment we remain cautious and are budgeting for second half full price sales to be down -1.2%, which is in line with our performance in the first half," its trading statement released this morning said.

As a result of this performance Next has slightly improved its full-year forecast by narrowing its sales guidance range for the full year to -3.0% to +0.5%. However it is holding its previous profit forecast of between -13.4% and -6.4% as it anticipates any improvement in full-price sales being offset by lower clearance rates during its end-of-season Sale in January.