...As is the case with other discretionary goods retailers--in particular in the highly competitive and fashion-sensitive apparel and footwear market in the U.K.--Next PLC will likely continue battling a decline in its in-store earnings in the near term. We forecast that in the next two to three years, the like-for-like (LFL) decline in store sales will be 8%-10%, in line with the 8.5% decline as per management's guidance for the financial year ending Jan. 31, 2019 (FY2019). The 10%-15% growth forecast in the online segment--which accounted for about 40% of total retail sales in FY2018--will help Next to offset these dynamics somewhat and post largely flat retail sales annually. Rising interest income on finance receivables will support overall sales increases of 0.5%-1.0% per year, compared with a 1.3% decline in FY2018. That said, the rising share of the lower-margin third-party brands in the product mix and increasing warehousing and logistics costs in the quickly expanding online segment...
