Next has posted an 8.2% fall in operating profit year-on-year to £759.9m, in what the retailer dubbed its “most challenging” year in 25 years.
It recorded an 8.1% drop in pre-tax profits to £726.1m in the year to January 2018, compared with the previous year.
Total group sales dipped by 0.5% to £4.1bn during the period. Retail full-price sales declined by 7% compared with 2016, but online full-price sales leaped by 11.2%.
The retailer said its earnings were in line with guidance issued last January.
Chairman Michael Roney said that the retailer has spent £104m on new stores, warehousing and systems.
Net debt grew to £1bn from £861m, which Roney said was driven by sales growth in its online credit business Nextpay. The debt remains within its £1.4bn bond and bank facilities.
Announcing the results, Next said: ”In many ways 2017 was the most challenging year we have faced for twenty-five years. A difficult clothing market coincided with self-inflicted product ranging errors and omissions.
“In the end our profits were in line with the forecast we issued in January 2017 and the Company goes into the coming year in good financial health.”
Meanwhile, group merchandise director Richard Papp, who has worked at Next for 25 years, will has been promoted to the role of group merchandise and operations director.
Its current group operations director, Michael Law, will retire from the board at the group’s AGM in May, after 23 years at the business.