Having delivered great results for years, UK retailer Next (LSE:NXT) has built up a very loyal following who will probably give the company a pass for blaming slower sales on the weather. No wonder the shares still look expensive...
FTSE indices were mildly down midday with financial, retail and mining issues the ballast. A profit warning from Next (NXT) saw it lead the blue-chip fallers lower, while Royal Bank of Scotland (RBS) gained on reduced 'bad loan' estimates.
Near noon, the FTSE 100 was down 10.54 points, or 0.16%, to 6636.06, while the FTSE 250 was down 19.68 points, or 0.13%, to 15,370.4.
NEXT (LSE:NXT) has been a great retail success story of the past 30 years. The fashion and home furnishings chain has continued to motor, even while some of the mightiest retailers -- I'm thinking of Tesco -- have stalled.
However, following an unscheduled trading update this morning, NEXT's shares have opened at 6,555p -- 5% down on last night's closing price of 6,865p.
FTSE indices opened mixed with financial, resources and retail stocks weighing on the blue-chip. Wall St and Asian markets were down overnight, the latter dented by on-going protests in Hong Kong.
Shortly after the open, the FTSE 100 was down 5.73 points, or 0.09%, to 6640.87, while the FTSE 250 was up 6.83 points, or 0.04%, to 15,396.9.
Next (NXT) led the blue chips and retailers lower. It said the overall effect of cooler weather in August and warmer weather in September was that Q3 sales to date were up 6%. This was below its previous forecast of +10%.
Next Plc said the cooler weather in August resulted in several very strong weeks. However, warmer weather in the more important month of September has had the reverse effect. The overall effect is that Q3 sales to date are up 6%, which is lower than its previous forecast of +10%.
At present our profit forecast for the full year remains within its previous guidance given on 29 July and reiterated on 11 September, and the retailer's experience suggests that some lost sales are regained when the weather turns.
2014 has been nothing short of horrific for investors in ASOS (LSE:ASC). That's because shares in the online fashion retailer have fallen by a whopping 63% since the turn of the year and show little sign of recovering anytime soon.