Next Q3 sales fall 17%

Fashion retailer Next has reported a 17.9% decline in Q3 amid the continued impact of the coronavirus pandemic.

The firm said its markdown sales were 12.3% lower than last year attributing to “lower footfall” in retail stores and “capacity constraints” in the online warehouses.

Cash flow forecast increased by £25m, as a result of the £30m “acceleration” in warehouse capital expenditures.

However, Next reported that this was partially offset by its online sales continuing to be strong with a 23.1% increase in both the UK and overseas.

Financial interest income reportedly fell 13% in Q3 due to “low customer balances”, which were also down 16% from the previous year. Next said its lower balances were a result of “much lower credit sales” during the lockdown periods.

Monthly customer payments in the third quarter were reported at 14.8%, which showed a “material increase” on the same measure last year which was 12.5%.

Home and childrens-wear purchases “remained strong” while the demand for men’s and women’s formal and occasion clothing struggled.

The company said it anticipates its profit before tax to be £365m and to see its year end net debt fall £487m to £625m.

Amanda James, group finance director at Next said: “The biggest single unknown is whether England, Scotland and Northern Ireland will follow Wales’ decision to shut non-essential retail shops.

“A two week lockdown in England, Scotland and Northern Ireland in November would reduce Retail full price sales by around £57m3 (depending on timing), representing 17% of Retail full price sales and 6% of the Group’s full price sales in the quarter.”