Fashion chain Next has raised its full-year profit guidance for the fourth time this year, contrasting sharply with the fortunes of Asos which has warned that its sales will continue to tumble.
Next added £10 million to its profit guidance, which now stands at £885m for the full year, following a 4% increase in sales during the three months to October 28. This doubled the pace of growth previously anticipated.
Sales were down year-on-year in September as warm weather put shoppers off from buying coats and knitwear, but cooler temperatures in the second half of October led to a boost of more than 11%.
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The company said it believes its volatile sales growth was down to variable weather conditions rather than any underlying changes in the consumer economy. In-store sales were 0.6% lower for the whole of the third quarter, but the online business was up by 6.5% for the period.
It was a completely different story at online-only retailer Asos, which warned that its sales will continue to fall after delayed results revealed that it slumped to a loss of nearly £300m for the year to September 3.
Revenues dropped to £3.5 billion from £3.9bn as Asos has faced heavy competition from companies such as fast fashion specialist Shein and rivals with a combination of stores and online retail.
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Pre-tax losses at Asos ballooned to £296.7m, up from £32m the previous year. Asos added that it expects sales to fall by anywhere between 5% and 15% in the coming 12 months as it works its way through a revival plan for the business.
Shares in Asos, once a darling of the London stock market, were nearly 11% lower in trading this morning. Shares in Next were more than 3% higher in early trading.
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