Next PLC (LSE:NXT), the fashion retailer, has dropped close to 5% since its last reported results in September, and falls could continue after its third-quarter update on Wednesday.
Sales at the start of the quarter are expected to have slowed because of unseasonably warm weather in October and overall will cause revenues to come in behind consensus for the three months, analysts have warned.
Despite being up against weak comparatives and activity picking up slightly in the latter part of the third quarter, the fall in trading is likely to buck the fashion group’s trend of upping guidance – having done so at its last three updates.
Consensus forecasts are expected to remain unchanged due to “peak trading” over Christmas and the festive period being just around the corner, with analysts thinking consumer demand will pick up as it nears.
“We would view any sluggishness in sales performance at Next to be more reflective of the unseasonably warm weather than weakness in consumer activity,” analysts at Peel Hunt said.
Investors will also keep an eye out for updates on the FatFace brand after the London-listed group purchased most of it for around £115 million.
Underlying profits are not expected to be influenced by the casual clothing brand in the current financial year.
However, any strategic updates involving the brand could prove helpful in identifying how it will be integrated into the wider business and whether it will impact any online operations.
Shares are up 1% ahead of the results, having opened at around 6,930p on Tuesday.