Retail giant Next revealed further trading woes yesterday as it reported a 5.9% fall in high street sales during the third quarter.

The fashion chain said full-price sales slumped as much as 7% in August in the wake of a large end-of-season sale the month before but it added that trading had improved since September, with full-price sales rising by 1.3% in October.

“In August full price sales were subdued following the much larger end-of-season Sale in July, and in September we traded against our best month last year,” Next said in a trading update.

“October sales improved significantly, as comparative weeks last year became less challenging.”

Overall sales across its stores and Next Directory arm fell 3.5% in the three months to October 31, with sales flat within the online and catalogue division. Next said the third-quarter performance had marginally lowered its central full-year sales expectations, with the group now forecasting a range from a fall of 1.75% to a rise of 1.25%.

Next boss Lord Wolfson said earlier this year that 2016 was set to be the “toughest we have faced since 2008”, warning over a shift in consumer spending away from fashion towards eating out and travel.

He also recently cautioned that Next may have to lift its prices by up to 5% next year as it faces surging import costs from the Brexit-hit pound.

Fashion chains have also been knocked by an unseasonably warm start to autumn, which dented demand for warmer clothing ranges.

But despite the sales blow, Next said its central full-year profits outlook remained unchanged at a mid-point of £805m thanks to better-than-expected cost savings.

Its profits forecast range, from £785m to £825m, pencils in a worst-case scenario of a fall of 4.4% to a rise of 0.5% on the year before.

Analyst George Salmon, at Hargreaves Lansdown, said 2016 was becoming an “annus horribilis” for Next.

However, Jonathan Pritchard at Peel Hunt, said: “Like-for-like sales are still negative but not in free-fall, and we believe that there is pent-up demand in the clothing sector.

“These aren’t vintage times, but Next is in good enough form to ride that wave.”