Next plc’s full-year results on Wednesday, March 29, may highlight that further pressures on consumer spending lie ahead.
Analysts at JP Morgan noted that while consumer sentiment has improved, the “outlook remains challenging”.
With around 5,000 customers surveyed by the American bank, it was found that while spending plans are less conservative than six months ago, respondents planned to cut back on discretionary items.
Behind socialising and eating out, clothing is the space where outlay will be most reduced, potentially bad news for the outlook of FTSE 100-listed retailer Next.
In terms of its bottom line, back in January, Next issued a warning on the current financial year, with full-price sales falling 1.5% and pre-tax profits falling 7.6% to £795mln.
With that being said, the retailer has a reputation for underpromising and over-delivering.
In its Christmas trading update, the group increased its profit before tax guidance by £20mln to £860mln, albeit this was a restoration of the group’s previous guidance which it clawed back on last Autumn.