Executive Summary

• British fashion retailer Next reported 3Q17 revenues for the three months ending October 31, 2016. Next Retail full-price sales declined 5.9% and Next Directory full-price sales were flat. Next Total brand full-price sales declined 3.5%, of which sales from newly opened space contributed 1.3%.
• The 3Q17 sales decline can be attributed to subdued full-price sales in August and difficult sales comparisons against strong monthly sales in September 2015. Sales in October 2016 improved, as sales comparisons from last year became less challenging.
• Following 3Q17 results, the company has narrowed its guidance ranges for FY17sales, profit before tax (PBT) and earnings per share (EPS). The company forecasts total full-price sales growth for the Next Brand to be between the range of (1.75)% and +1.25%. The mid-point of the revised sales range is slightly lower than the previous sales guidance. Reflecting better-than-expected cost savings, Nextforecasts FY17 PBTto fall in the range of (4.4)% to +0.5% year over year to €785–825 million. FY17 EPS growth is expected to fall between (1.3)% and +3.7%.