3Q17 Trading Update

British fashion retailer Next reported that total full-price sales increased by 1.3% in 3Q17 (ended October 29). Full-price sales at Next Retail, the segment that represents store-based sales, declined by 7.7% year over year. The Next Directory segment, which includes e-commerce and catalog sales, grew full-price sales by 13.2%. Sales from new retail space accounted for a full-price sales increase of 1.2%. Total sales including markdowns were up 0.8% year over year in 3Q17.

Outlook

The company narrowed its FY17 revenue and profit guidance following the 3Q17 results. Next now expects total full-price sales of the Next brand to grow by (1.75)%–1.25%; the midpoint of this range implies that sales will be down 0.3% in 4Q17. The company expects FY17 PBT of £692–£742 million, representing year-over-year growth of (12.4)%–(6.1)%. Next expects FY17 EPS to decline by 10.0%–3.5%. The consensus estimate for FY17 revenue stands at £4,116 million, implying a year-over-year decline of 0.5%. The consensus estimate calls for PBT of £726 million, implying a year-over-year decline of 8.2%, and for EPS of 409 pence, implying a year-over-year decline of 5.2%.