But despite what it called “very challenging trading conditions in the run up to Christmas”, Next’s profit forecast for the year ending January 2011 remains within its forecasts.
The catalogue business finished the season up 8.7 per cent and initially benefited from the adverse weather conditions, with people ordering from home rather than braving the cold. However, in the immediate run up to Christmas the fear of failed deliveries reduced demand.
Retail sales, which were down 3.1 per cent, were significantly affected by extreme weather conditions and increased competitor discounting on the high street before Christmas.
Next estimates it lost £22m of full price sales as a result of the snow (representing 2.2 per cent of the season’s total sales) leaving like for like sales down 6.1 per cent. Retail sales were also affected by limited stock availability on best-selling lines in the run up to Christmas.
The company now estimates that full year profit before tax will be in the range of £540m to £555m and is in line with current market expectations. This would represent an increase of between 7 and 10 per cent on last year. Full year results are anticipated to be announced on March 24.
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