British clothing retailer Next has reported sales for its latest quarter below some analysts' expectations and said trading was "extremely volatile", sending its shares as much as 9% lower.
The news is the latest sign a faltering economy is hitting consumers and adds to the dilemma for the Bank of England as it weighs up whether to lift interest rates for the first time in ten years tomorrow to curb inflation.
Shares in Next had risen by 26% in the last three months on hopes the group was starting to turn the corner after a difficult couple of years.
But they were down 4.5% at 4,702 pence at 9.30am, while shares in rivals Marks & Spencer and Debenhams were down 3.4% and 2.9% respectively.
Next, which trades from more than 500 stores in the UK and Ireland, 200 stores in 40 countries overseas, and the Directory internet and home shopping business, said sales in August and September were up strongly on last year as cooler temperatures drove demand for autumn/winter ranges.
However, sales dipped in October, which was unseasonably mild.
"(The) sales performance has remained extremely volatile and is highly dependent on the seasonality of the weather," it said.
Next's total full-price sales rose 1.3% in the 13 weeks to 29 October, its fiscal third quarter, below some analysts' expectations of a rise of over 4% but ahead of the second quarter's 0.7% increase.
"A particularly weak October means the group enters the all-important Christmas period with less momentum than it would have liked," said Hargreaves Lansdown equity analyst George Salmon.
Next Chief Executive Simon Wolfson said the third quarter outcome was, however, in line with management's expectations.
"I can't take responsibility for the analysts' number, it's bang in line with where we expected to be," he told Reuters.
Next is not alone in reporting a tough October. Yesterday John Lewis, Britain's largest department store group, reported a fifth straight fall in weekly sales.
Britain's most successful clothing retailer this century in terms of profits, Next has faltered over the last two years due to a shift in spending away from clothing and into holidays and entertainment that it first identified in 2015.
Full-price sales in Next's stores were down 7.7%, but were up 13.2% in its directory business.
Next maintained its central profit guidance for the full year - a pretax profit of £717 million, down from £790.2 million in 2016-17.
It narrowed its guidance for full-price sales, forecasting a range of down 1.75% to up 1.25%. It had given a range of down 2% to up 1.5% in September.
Next said comparative sales numbers with last year were much harder for the fourth quarter than in the third.
