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High street fashion retailer Next (LON:NXT) watched its shares plunge by 7.28% to 5,504p (as of 12:00 BST) after the company issued a trading statement revealing that full price retail sales dropped by 5.3% during the half year to 28th July. There was positive progress online and the planned clearance sale was successful, but these were counterbalanced by higher warehousing and distribution costs.
Online sales were up by 15.5%, with the majority of the growth coming from international markets and third party brands, with UK sales of NEXT branded stock seeing only a modest improvement. Combined sales for the group climbed by 3.9% over the half year.
While sales in the second quarter were ahead of management guidance, the company warned that this was most likely linked to the warmer than expected weather and that some of these sales would have essentially been pulled forward from the current period. As a result, the current full year sales and profit guidance has been maintained for the time being.
The company has now completed the £300 million share buyback scheme that it outlined in January of this year, which should improve earnings per share by 4.7%.