Retailers’ share prices dragged down as Next sinks
The retail sector is getting a hammering today after Next posted a sales slide for the Christmas season.
Next's share price has tumbled 11 per cent in morning trading, and following it downwards are Marks and Spencer, which has fallen five per cent, and Primark-owner Associated British Foods, which is down 3.84 per cent.
Read more: Retailers will need to brave fierce headwinds in 2017
After disappointing Nov/Dec sales, Next warn that full year profits will be near the bottom of the range at £792m and expect a fall in 16/17
— Nick Bubb (@NickBubb1) January 4, 2017
The sell-off comes as Next warned of price rises due to the fall in the value of the pound since the Brexit vote, and suggested that the government had not given businesses enough clarity on how Brexit negotiations will pan out.
George Salmon, equity analyst at Hargreaves Lansdow, said: "Despite hopes of a more positive Christmas for the retailers, Next's results have set the tone for what is likely to be a difficult reporting season.
"Group sales are down even against a weak Christmas period last year."
Read more: Brrr… New Year cold snap stuns retailers
Neil Wilson, senior market analyst at ETX Capital, said Next had "ended a terrible year on a bum note".
Discount retailer B&M bucked the trend this morning, however, as its share price jumped over seven per cent. It reported a UK like-for-like sales growth of 7.2 per cent and group revenue growth of 20.5 per cent.