LONDON (Alliance News) - Next PLC on Thursday reported lower profit in the first half of its financial year, as although overall revenue grew, margins were squeezed as sales of markdowns outperformed sales of full-price items.
The clothing and homeware retailer said pretax profit in the 26 weeks ended July 30 fell to GBP342.1 million from GBP347.1 million the year before, despite revenue rising to GBP1.94 billion from GBP1.89 billion.
Sales at Next Retail grew by 0.1%, while Next Directory sales rose by 7.1% and Next Brand sales were up 3.0%. Full-price sales within Next Retail fell by 3.2%, however.
Despite the overall growth in revenue, margins declined as sales in marked-down items grew more than full-price sales, hitting profit. Retail margin decreased to 12.4% from 14.9%.
Next maintained its interim dividend at 53 pence per share.
"There has been some talk of a general retail bounce in July and whilst Next did enjoy very strong sales in July, this was driven by a much larger end-of-season sale," Next said in a statement, adding that full-price sales in July remained "subdued".
"Trading since July, which to some extent may have been affected by the sale, has remained challenging and volatile. We are maintaining our full-year sales guidance but expect to have a clearer picture of trading conditions at the beginning of November when we announce our third-quarter sales," the company added.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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