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Published On: Sun, Sep 10th, 2017

Next facing profit drop as group hit by slowdown in consumer spending


The group has been hit by the slowdown in consumer spending, but with signs of a recovery over the summer. 

Next and department store giant the John Lewis Partnership both publish first-half results on Thursday to shine light onto the troubled retail sector. 

John Lewis, which also owns Waitrose, has been cutting jobs and trimming expansion plans as the national living wage increases costs, yet posted a 3.2 per cent rise in full-year sales to £11.4billion earlier this year. 

Charlie Muir-Sands, research analyst at Deutsche Bank, expected Next’s profits to drop from £342million to £284million on weak store performance, despite improvements in the Next Directory catalogue credit service. 

“Next is still losing clothing market share as its core UK business remains challenged,” he said. 

George Salmon, equity analyst at Hargreaves Lansdown, said Next continues to generate significant excess cash: “It currently plans to pay out £250million in special quarterly dividends and a trading improvement could raise hopes of further distributions.”



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