High street giant Next has dropped its full-year profit guidance for the year by 0.6%, despite a rise in full-price sales of 1.5% over the Christmas period.
Christmas sales edged up by 1.5% at Next for the period between 28 October and 29 December 2018, as strong online growth offset ailing retail sales.
Full-price sales were ahead of expectations and up 15.2% online, but retail sales fell by 9.2% – a larger drop than anticipated.
While sales guidance remains in line with expectations for the full year, the retailer has lowered its profit guidance by 0.6%, and profits are now expected to be £4m lower, at around £727m.
The drop was blamed on high sales of seasonal products, such as gifts and beauty, reducing margin by around £1.5m. A further £2.5m reduction was attributed to increased operational costs for online sales.
Overall for the year to 29 December 2018, full-price sales at Next are up 3.2%, similarly fuelled by strong online growth.
The retailer noted that future sales and profits forecasts held high levels of uncertainty, and the unstable UK economy and Brexit made it difficult to plan accurately. The retailer noted that it had factored in neither a smooth Brexit transition nor a disorderly Brexit in its planning.