Next set to post H1 results

Slight drop in profits expected
Slight drop in profits expected

Retail heavyweight Next will shed light on its trading next week as it updates the market on its half-year performances as the dust begins to settle following Britain’s decision to quit the European Union.

Further insight into retail and consumer confidence after the Brexit vote will be given on Thursday.

The chain has been gloomy on retail prospects in recent months, warning of a consumer spending shift away from clothing and last month alerting over possible price hikes to combat the falling pound.

But chief executive Lord Wolfson has so far said there has been no clear evidence of a worsening in trading directly as a result of the referendum decision.

In an update last month, Next surprised the market with a better-than-feared second quarter performance, with a robust end-of-season sale helping limit the fall in total high street store sales, including markdowns, to 0.7%.

Full-price sales at its high street stores fell 3.3%, but its Next Directory arm saw sales rise 5.7%.

This helped it to nudge up its full-year profit forecast, to a mid-point of £810 million from the £800m previously guided. But it cautioned over a future hit from the pound’s weakness since the Brexit vote, saying it could push up costs of importing clothes from overseas suppliers by as much as 5%.

This would likely be passed on to shoppers in higher price tags, Lord Wolfson revealed.

Its half-year results will show a 5% drop in interim pre-tax profits to around £330 million, according to analysts at Numis Securities.