Last checked at 
* Also hit by poor stock availability and online competition
* Full-price sales growth slows to 0.4 pct vs year earlier
* Forecasts 2015-16 pretax profit of 817 mln stg, up 4.4 pct
* Shares fall by up to 5.5 pct
* Shares in M&S, Debenhams also lower (Adds detail, CEO, analyst comments, shares)
By James Davey
LONDON, Jan 5 (Reuters) - British clothing retailer Next reported disappointing sales in the run-up to Christmas,with the normally reliable company blaming unusually warmweather for a slowdown that is expected to have hit the widersector.
Next has been the strongest player in Britain's clothingsector for a decade and its shares fell by up to 5.5 percent onTuesday after it said full-price sales rose just 0.4 percent inthe two months to Dec. 24.
It also blamed poor stock availability and increased onlinecompetition, worrying for a company seen as having one of theindustry's slickest logistics operations and online businesses.
The outcome compared with company guidance for second-halfgrowth of 3.5-7.5 percent and third-quarter growth of 6 percent.The retailer said it now expects full-year pretax profit will beat the lower end of its forecast range, but also announcedanother special dividend payment.
Next, which trades from more than 500 shops in Britain andIreland, about 200 mainly franchised stores overseas and itsDirectory catalogue and Internet business, is the first majorBritish retailer to report on festive sales and its poorperformance augurs badly for rivals.
Shares in Marks & Spencer, which is due to report onThursday, by fell up to 2.1 percent, while Debenhams,dropped by as much as 2.5 percent.
Unlike Next, which has a longstanding policy of notdiscounting before Christmas, those two retailers discountedpre-Christmas.
Shares in Next have now lost more than 14 percent in thepast month as the sector was battered by worries that the mildweather would hurt sales.
Britain recorded some of the hottest November and Decembertemperatures on record, depressing demand for winter clothing,and the retailer produced a graphic showing the correlationbetween the warm weather and weaker sales.
"The reality is that the vast majority of underperformanceis about weather," Chief Executive Simon Wolfson told Reuters.
"My guess is that most but not all clothing retailers willhave been affected in a similar way," he said.
However, he said the slowdown in growth in Next Directory'ssales to 2 percent from 6.2 percent in the third quarter wascompounded by poor stock availability at its smaller brochures.Wolfson pledged to completely resolve that problem by Christmas2016.
But he also highlighted that online competition was gettingtougher as industry-wide service propositions catch up withDirectory.
"It was always going to happen. That window of Next havingsuch a big lead in terms of its evening service (order before 10pm for next-day delivery) has now disappeared," he said.
Thanks to good control of margins, costs and stock, alongwith healthy clearance rates in its post-Christmas sale Nextexpects to make a 2015-16 pretax profit of 817 million pounds($1.20 billion), towards the lower end of previous guidance of810-845 million pounds, but up 4.4 percent on 2014-15.
"The disappointing Directory results are likely to resurrectconcerns re the maturity of the Directory channel," said CantorFitzgerald analyst Freddie George, who has a "buy" stance on thestock.
"Next, however, has an outstanding record and has achievedguidance even if it is at the lower end of the range in avolatile trading environment."
The retailer, which has a well-established policy ofreturning surplus cash to shareholders through share buybacks orspecial dividends, also said it would pay another specialdividend of 60 pence. It maintained its share buyback limit at69.62 pounds.
Next is budgeting for full-price sales growth in the2016-2017 year of 1 percent to 6 percent, with profit growing inline with sales. ($1 = 0.6793 pounds) (Editing by Kate Holton and Susan Fenton)
