Next has announced a dip in its annual profits as the decline of its physical store sales continues.
The fashion retailer’s pre-tax profits for the year to January were in line with expectations at £722.9m, a fall of 0.4%, this was attributed to store sales decreasing by 8% from £2.12bn to £1.95bn. It was also despite online sales increasing by 14% to £1.92bn.
As such, profits at its high street stores fell by 21%, while online profits jumped by nearly 14%. Overall total group sales, including the finance division, rose by 2.5% to £4.22bn.
In his statement chief executive Lord Simon Wolfson said the group had delivered profits “exactly in line with the guidance issued in January”.
He said: “As anticipated, the year to January 2019 was challenging for Next as we continued to experience a structural change in our business, with sales continuing to transfer from our stores to online. Despite this, earnings per share for the group increased by +4.5% to 435.3p. We are proposing a final ordinary dividend of 110p taking the total ordinary dividend for the year to 165p, an increase of +4.4% on last year.
“Even though the high street looks set to remain challenging our online business continues to increase its contribution to sales and profit of the group. Our central guidance for the year ahead is for earnings per share to grow by +3.6%.
“The board continues to be focused on building shareholder value through the delivery of long term sustainable growth in earnings per share. Our core strategy remains unchanged; focus on our customers, products and profitability, continuing to build on the capabilities of our brand and online platform and returning surplus cash to our shareholders.”