UK retailer Next warns of 'toughest year' since crisis
Next, one of Britain's biggest fashion retailers, warned on Thursday that 2016 was set to be its toughest year since the global financial crisis, sending its share price tumbling.
"The year ahead may well be the toughest we have faced since 2008," chief executive Simon Wolfson said in the company's annual results statement as Next slashed its sales forecast.
"We are very clear on our priorities going forward and whatever challenges we may face, it is important that we remain focused on ensuring that the company's product, marketing, services and cost controls all improve in the year ahead."
Next issued the gloomy outlook in a results statement which revealed that pretax profits nevertheless rose five percent to £821.3 million ($1.16 billion, 1.04 billion euros) in its financial year ending in January.
However, the group also cut its full-year sales forecast by two percentage points, citing the gloomy state of the world economy.
"2016 will be a challenging year with much uncertainty in the global economy," said chairman John Barton.
The London-listed retailer predicted this year's annual revenues would be in a range of down 1.0 percent to up 4.0 percent. That contrasted with the previous estimate for growth of between 1.0 and 6.0 percent.
In response, shares nosedived 12.76 percent to 5,810 pence in late morning deals on London's FTSE 100 index, which was down 1.37 percent overall.
"Next shareholders lost their shirt when the company's stock dropped double digits after chief executive Simon Wolfson offered a stark warning for the year ahead," noted CMC Markets analyst Jasper Lawler.
In more gloomy news, official data showed Thursday that British retail sales slid 0.4 percent in February compared with the previous month, as poor weather persuaded many people to delay purchases of spring and summer clothing.
However, that was less than market expectations for a 0.7-percent drop, according to analysts polled by Bloomberg News.
© 2016 AFP