Profit before tax at High Street retailer Next fell by 12.4 per cent to £173.5 million for the six months to July 2008, down from £198.2 million for the period in 2007.
Retail full price like for like sales were down 6.0 per cent, although Next Directory sales were up 2.2 per cent.
However, the retailer seemed downbeat about any improvements in the economy in the medium term, stating that retail should prepare for another tough year in 2009/10.
"We can see no reason why there should be any recovery in consumer spending during the next six months," the firm said in its statement. "Food and energy prices continue to be well ahead of last year and our customer base is particularly exposed to higher refinancing costs of mortgages."
Next said that it is budgeting for autumn/winter retail like for like sales to be in the range of -4 and -7 per cent and Directory sales to be in the range of 0 and 2 per cent.
Next said it believed the group was well prepared for the current environment with sound financing and good cash flows.