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Next (Q3 trading statement 31 October)
As other rivals flounder, with Debenhams being the perfect example, Next’s online arm remains the company’s (not so) secret weapon. Its online division is set to receive more resources, and overseas sales are becoming another focal point.
A drop in profitability in the first half underscores the challenge, even as it works hard to keep costs under control and boost gross margin. While it remains determined to stick with bricks and mortar stores, it has made preparations to reduce its commitment to the high street, if and when that becomes necessary. At 11.5 times forecast earnings, the shares are at their cheapest level in several months, and are well below the 13.8 five-year average.
Next shares have fallen out of the rising channel that held through the second half of 2017 and into 2018. Rallies in September and October brought out the sellers, and if the price cannot recover £52.60 then further downside towards £44.91 seems likely.