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Next plc (LON:NXT) fell out of fashion in the City after cautioned that this year could be the toughest it has faced since the financial crisis.
The clothing retailer, which blamed mild weather for a weaker Christmas, said the outlook for consumer spending did not look as benign as it was at this time last year.
Wage growth and economic output had slowed since September last year and the retailer said there may be a move away from clothing towards areas that suffered most in the credit crunch.
"Our instinct, along with the volatility of our own sales, suggest it would be sensible to prepare for a tougher economic environment," chief executive Simon Wolfson said.
"We are therefore revising our full year guidance for sales and profits in the year ahead."
Next said underlying earnings per share rose 5% to 442p in the year to January 2016 and it planned to increase its Total full-year ordinary dividend by 5% to 158p.
Sales for its Next Directory online and catalogue business increased 8% and Next Retail 1%. Total group sales rose 3% to £4.1bn. Underlying pre-tax profits lifted 5% to £821.3mln.
But the chain said it now expected full-price sales growth for the year to be between -1% and 4%, with a mid-point of 1.5%.
The chain expects group pre-tax profit to be between £784mln and £858mln, meaning profits in the year to January 2017 could fall or rise up to 4.5% against a year ago
Shares in Next fell 950p, or 14.3%, to 5710p.
Broker Peel Hunt downgraded the retailer to 'reduce' and cut its price target on the stock to 6400p from 7000p.
Hargreaves Lansdown investment analyst Charlie Huggins said: "The numbers posted by Next were in line with expectations, but the cautious outlook has done for the share price.
Russ Mould, investment director at AJ Bell, said: "A cautious outlook statement from Next is hitting the online and high street bellwether’s shares hard and raising questions over whether consumers really are feeling the benefit of the windfall provided by lower oil and petrol prices – and if so, how they are spending it.
"“The company suggested consumers may be preferring to spend on eating and going out rather than clothes. This view is supported by how food & drug retailers have performed this year compared to general retailers."
Meanwhile, there was better news from the Office for National Statistics, which reported that UK retail sales fell less than expected in February.