High Street giant Next (GB:NXT) has cut its full-year profit forecast and warned that Britain was facing a ‘second cost-of-living crisis’ sparked by the Pound’s increasing weakness.
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The iconic fashion retailer now expects a full-year pre-tax profit of £840 million, compared to a previous estimate of £860 million.
The company said in a statement, ““August trade was below our expectations and cost of living pressures are set to rise in the coming months. Sales in September have improved, and we may see benefits from recent government measures.”
Next shares fell on the news but have regained some ground today.
Second cost-of-living crisis
Next’s chief executive, Tory peer Lord Simon Wolfson, warned of a second cost-of-living crisis driven by the plunging pound.
He said, “We are living through the cost of living crisis twice over, once as a supply-side crisis and the second time as a foreign exchange one.
“It is almost impossible to see a situation where prices in the second half of next year are not higher than now, and possibly significantly so”.
Is Next a buy or sell?
According to TipRanks’ analyst rating consensus, Next Inc stock comes in as a Moderate Buy.
Out of 10 analyst ratings, there are three Buy recommendations and six Hold recommendations.
The Next price target is 6,693.75p, implying an upside of 30.04%. Analyst price targets range from a low of 71.00p per share to a high of 141.00p per share.
Conclusion
Next’s profits are still up on last year, but Lord Simon Wolfson has been clear that there is a bumpy road ahead.
