Next's Weather Alarm May Be Bad News for U.K. Retail Stocks
(Bloomberg) -- A warning from U.K. apparel chain Next Plc that its heatwave-induced boost to quarterly sales won't last may be a sign of what's to come for other clothing retailers.
Next shares fell as much as 6.4 percent, the most in nine months, after the company kept its growth forecast for the year, saying that sun-kissed British shoppers had bought hot weather clothes they typically purchase in August earlier this summer. Peer Marks & Spencer Plc, which will report half-year results in November, dropped as much as 2.5 percent. Declines in the stocks helped push the Stoxx 600 Retail Index down 0.8 percent, making it among the worst-performing groups on the broader gauge.
“Next's comments are an indication that the weather is having an impact on when consumers spend money and doesn't necessarily translate to increased revenue,” Bloomberg Intelligence analyst Chris Chaviaras said in emailed comments. “Other U.K. retailers may choose to keep a cautious stance, even if they see their sales getting a weather boost in the short term.”
To contact the reporter on this story: Lisa Pham in London at lpham14@bloomberg.net
To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, John Viljoen
©2018 Bloomberg L.P.
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