British retailer Next reported this morning third-quarter underlying sales at the top end of its expectations and said it would meet full-year profit forecasts.
But shares in the UK's second-largest clothing retailer by sales value fell by up to 3.8 per cent as it warned underlying sales would remain negative throughout 2009.
Next said like-for-like sales in 334 stores unaffected by new openings were down 4.4 per cent in the 14 weeks to November 1st.
This outcome was towards the top end of its second-half forecast range of minus 4 per cent to minus 7 per cent.
Sales at its Next Directory catalogue and online business were up 2.1 per cent, which compared with a company forecast of flat to plus 2 per cent.
Nick Bubb, analyst at Pali International, said the performance was much better than the minus 7.5 per cent he had expected for Next Retail and minus 1 per cent he anticipated for Next Directory.
"Improvements they've made to the ranges and store formats have perhaps begun to have some impact and begun to stabilise and improve their market share," he said.
Having cut forecasts last week he said he was now raising his year to end-Jan 2009 pretax profit forecast from £400 million to £420 million.
Analysts expect Next to make a pretax profit of about £426 million ($674 million) for the year, according to the average forecast of 18 analysts polled by Reuters Estimates, down from £498 million the year before.
They reckon Next will maintain its full-year dividend of 55 pence. The group forecast year-end debt of about £670 million.
Many UK retailers are struggling as shoppers cut back on spending amid rising unemployment, falling house prices and growing fears of recession.
Reuters