Next sales down 3% in "challenging" consumer environment

Bellwether clothing retailer Next has reported sales down 3% in the first quarter of its financial year saying the "UK consumer environment remains challenging".

Total full-price sales in the quarter ending 29 April were down 3% with retail sales down 8.1% and Directory sales up 3.3%. Total sales, including markdowns, were down 2.5%. The performance in is in-line with guidance previously offered by the retailer.

"The UK consumer environment remains challenging, particularly in the clothing and homeware markets, and real wage growth is now close to zero," the retailer noted in its statement.

When it announced its full-year results in March, Next said that some of its problems had been of its own making. It had improved its trend-led fashion offer but in doing so had taken its eye off the ball when it comes to its core, best-selling lines.

"In our full year results announcement in March we talked about omissions in some of our product ranges. We said that we expected some improvements from May onwards, but that our ranges would not be where we wanted them to be until the Autumn season in September. We still believe this to be the case," it said in its statement.

The business has moved to dampen expectation on profit for the next financial year saying it now expects it fall between 13.9% and 6.4% (its previous guidance placed the range between a drop of 13.9% and 1.3%). Its guidance for the sales performance for the next financial year now ranges from a drop of 3.5% at the lower end to an increase of 0.5% at the higher end (previous guidance -3.5% to +2.5%).