Shares in high street fashion retailer Next slumped yesterday after it warned that its bottom line was under threat from unseasonably good weather.
The firm told investors that it may be forced into lowering its profits guidance for this year if the Indian summer continues throughout this month.
Sales in the quarter to the end of October at the retailer are currently 6% ahead of the year previous, but management had expected that figure to come in at around 10% up.
The firm said it hopes it would recover some of the lost sales especially of jumpers and coats when the weather turned for the worse.
However, if the unusually warm conditions continue for the rest of this month it is likely to lower its full-year profit guidance of £775 million to £815m.
The group, which overtook Marks & Spencer with a £695m annual profits haul earlier this year, had been experiencing its strongest sales growth for many years prior to the slower performance seen last month.
Next shares opened 5% lower, while other retailers including M&S and Sports Direct, were also impacted by the update.
Next said the tougher trading last month followed a period of cooler weather in August which resulted in several very strong weeks for sales.
The company will provide a further update about the third quarter on October 29.
Freddie George, a retail analyst at Cantor Fitzgerald, has retained his buy rating on the stock and said the underlying trends for Next remain positive, in contrast with the difficult conditions facing M&S and Debenhams.
He added: “The impact of the mild weather, which we have been flagging up over the last two weeks, is impacting all retailers in the UK and is only a temporary phenomenon.”
Shares in Next closed the session down almost 4% or 260p at 6,605p.