NEXT is poised to report a drop in full-year profits this week. The High Street giant is expected to reveal a four per cent slide in annual pre-tax profits to £792 million, down from £821.3m last year, as a shift in spending away from clothing and footwear takes its toll on sales.

The group said in January that it predicts overall full-price sales to fall by one per cent after tough trading over Christmas sparked a 0.4 per cent fall in the quarter to December 24.

Chief executive Lord Wolfson, a pro-Brexit campaigner, has also warned cost pressures driven by the Brexit-hit pound could see the chain hike prices by up to five per cent.

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Graham Spooner, investment research analyst at The Share Centre, said: “A major issue for the group is the increase in import costs due to the weak pound and investors are keen to see if that is going to be passed on to customers or absorbed by the company.”

Lord Wolfson offered a gloomy outlook for Next when he updated the market in January, forecasting that 2017 will be “even tougher” and predicting 2018’s profits will tumble to between £680m and £780m.

He said that while the Government was right not to be rushed into a Brexit plan, fears over the negotiations would increase pressure on an embattled retail sector.

“It will take them time and we have to be patient, but there will be uncertainty in the meantime,” he said.