Next Plc says it s been too hot and too cold

Next is sort of blowing hot and cold this morning.

Britain’s second-biggest clothing retailer says it might lower its full-year profit forecast.

It would do that if the unusually warm autumn weather we’ve enjoyed so far this autumn continues.

Next said the driest September across the UK since records began in 1910, according to The Meteorological Office, is deterring shoppers from buying winter clothing.

September is also likely to end up being in the top 5 warmest ever Septembers, the UK’s official weather forecaster has said.

Next Plc. said in a trading statement released ahead of an investors meeting that cooler weather in August resulted in “several strong weeks”.

But unseasonably warm weather in the “more important month” of September brought about weaker than expected trading.

Next cautioned in the statement this morning:  “Our experience suggests that some lost sales are regained when the weather turns. However, if this unusually warm weather continues for the full duration of October then we are likely to lower our full-year profit guidance range of £775m to £815m.”

This is slightly confusing, no?

Though to be fair, John Lewis Partnership has also said shoppers were delaying purchases of winter clothing because of unseasonably warm weather, when it reported a weekly sales dip on 19th September.

A conditional profit warning

Investors tend to be a little suspicious of the weather used as an excuse for poor trading.

Perhaps more leeway is given to fashion retailers.

But Next Plc. managers will definitely be queried by investors at an investor day later this week about today’s statement.

It’s almost a conditional profit warning.

The shares have traded as low as 6480p this morning, a 5.6% loss.

As for the rest of trading, the group, which has over 500 stores in Britain and Ireland, about 200 overseas, and a ‘Directory’ internet and catalogue business, said third-quarter sales to date were up 6%.

That’s lower than its previous forecast of a 10% rise.

Overall, it’s unlikely this morning’s news will be enough to lose Next many friends in terms of investors in the sector.

The market likes Next Plc.’s 18.6% trailing five-year consolidated annual growth rate for one thing (peers average about 2.2%).

Still, the shares had gained more than 36% this year, before this morning, so on that basis, the stock was probably due a pause anyway.