LONDON (Reuters) - Britain's No.2 clothing retailer Next (L:NXT) cut its profit guidance on Wednesday after unusually warm weather suppressed demand for its winter wear, sending an ominous sign to rivals ahead of the crucial Christmas season.
Next, which trades from over 500 stores in Britain and Ireland, about 200 stores overseas, and through its Directory internet and catalogue business, said profit for the full-year was expected to be within a range of 750 million pounds ($1.2 billion) to 790 million pounds.
That would represent year on year growth of between 8 and 14 percent but was lower than previous guidance of 775-815 million pounds.
The comments had extra resonance coming from Next which has outperformed rivals for a decade due to a strong online offer, new store openings and diversification into new product areas, such as homewares, as well as new overseas markets.
The firm was forced to make the cut after sales for the 13 weeks to Oct. 25, its fiscal third quarter, grew by 5.4 percent, below its previous forecast of 10 percent, as shoppers held off buying coats and jumpers.
The company said it did not intend to pay any further special dividends this year but could still make share buybacks.
Next had warned on Sept. 30 that profit forecasts could be reduced if the warm weather persisted, rattling its shares as well as rivals' across the sector.
Recent data showed UK retail sales fell more than expected last month, with clothing demand hindered by the driest September since records began in 1910, according to the Met Office. A cold snap has also failed to materialise in October.
Next said that the volatility of current trading and a very strong performance last year meant it had also cut sales expectations for the fourth quarter, forecasting growth of 1 percent versus previous expectations of 4 percent.
(1 US dollar = 0.6193 British pound)
(Reporting by Neil Maidment; editing by Kate Holton)