Next warns of sales slowdown while stock availability still ‘challenging’
Fashion retailer Next this morning warned it is anticipating a sales slowdown next quarter as pent-up post-lockdown demand eases.
In a trading update, the clothing firm said its full price sales in the thirteen weeks to October 30 were up 17 per cent compared to pre-Covid levels.
However, it warned its fourth quarter growth would be lower than the third quarter as shoppers no longer had the same post-lockdown demand for clothes.
Next said it would maintain its full price sales guidance at 10 per cent growth and full year profit before tax at £800m.
The retailer also warned that price increases for essential goods, such as fuel, could “moderate demand for more discretionary purchases.”
Stock availability had improved but remained “challenging,” the retailer said, pointing to delays in its international supply chain alongside delivery driver shortages and warehouses at home.
Stock limitations seemed to be offset by strong underlying demand, it added.
The retailer said it had beaten its full price sales forecast by £14m during the last five weeks, generating some £4m in profit.
However, it said this would be “largely offset” by further investment in digital marketing and increased use of inbound air freight and other online distribution costs.