Next PLC (LSE:NXT) will update the market with a third-quarter trading statement on Wednesday, and investors will be hoping for no more profit warnings from the high street royalty.
In its interim results issued at the end of September, the FTSE 100 retailer rowed back on its guidance for full-year profit before tax, trimming it back by £20mln to £840mln.
“We think it is sensible to moderate our expectations for sales and profit in the second half,” boss Lord Wolfson said.
Full-price sales are expected to be 1.5% lower in the second half as the cost-of-living crisis bites.
Retail, like many industries, has been hit by macro-conditions such as high energy prices and the squeeze this has put on consumers.
But the mix of physical and online presence leaves Next better positioned than pure online players such as Boohoo, argued broker Shore Capital, while also being a "remains a well-managed company with tight cost and stock control, a clear well-executed strategy and an experienced management team".
Analysts at UBS noted that Next had pointed to "some mitigation" for cost price inflation due to the pound's devaluation, "such as easing capacity constraints, producer nations’ currency devaluation, likely lower shipping/commodity costs as well as new sources of supply", while Next is looking to recover some of the losses in the second half of the year.
Share price movements reflect the sector's travails, with NXT shares down 38% to 4,977p in the year so far.