Pre-tax profit at Next for the year to 31 January fell 3.8% on 2016 amid “challenging” trading conditions on the high street.
Total group sales edged down 0.3% to £4.1bn for the year as in-store sales slipped 2.9% on last year and online and catalogue sales increased 4.2%.
In total, full-price sales at the retailer were down 1.3% year on year.
Instore full-price sales were down 4.6%, whereas online full-price sales were up 3.6% on 2016.
Stock for Sales was up 17% on last year and mark-down sales were up 13% overall.
Next said 2017 would be another tough year for the business, but it remained focused on product, marketing, services, stores and cost control.
Chief executive Lord Wolfson added he was “extremely cautious” about the outlook for the year ahead.
He said headwinds, including a sectorial shift away from spending on clothing, price inflation as a result of the reduced value of sterling and potentially weaker growth in real incomes in the wider economy, would hit the business – in particular its bricks-and-mortar estate – as shoppers continue to migrate online.
However, Next has maintained its guidance range it issued in January. It expects total full-price sales growth for 2017/18 of between -3.5% and +2.5%, and earnings per share growth of -12.4% to +0.5%.