6th Jan 2026 08:57
(Alliance News) - Next PLC on Tuesday said UK sales and growth in its international business surpassed expectations, as it lifted profit guidance for the fifth time this financial year.
The Leicester, England-based clothing and homeware retailer said full-price sales were up 11% in the nine weeks that ended December 27 compared to last year, ahead of guidance for annual growth of 7.0%.
UK sales increased 5.9%, ahead of 4.1% prior guidance, while International sales leapt 38%, materially better than 24% guidance.
UK online sales rose 9.1% in the quarter with retail growth of 1.4%.
Next said this "over-achievement", along with additional sales forecast in January, adds GBP51 million to full price sales for the full-year.
As a result, the FTSE 100 listing raised guidance for financial 2026 pretax profit by GBP15 million to GBP1.15 billion. This would be growth of 14% from GBP1.01 billion in financial 2025.
It is the fifth time Next has increased profit guidance in the current financial year, after upward revisions in trading updates in March, May, July, October last year.
Next expects total group sales, including discounting, of GBP6.97 billion, up 10% year-on-year, and above prior guidance of GBP6.87 billion. Full-price sales are expected to rise 11% on-year to GBP5.60 billion.
Post-tax earnings per share of 738.8 pence, up 16% on-year, compared to a previous forecast of a 15% rise to 729.4p.
Guidance is for a 52-week period in order to provide a direct comparison against previous years. Next's current financial year ending January 2026 is a 53-week year.
The addition of week 53 will add around GBP22 million of pretax profit and around GBP20 million of cash flow, Next explained.
Shares in Next were up 3.2% to 14,020.00 pence each in London on Tuesday morning. The wider FTSE 100 index was up 0.6%.
In the UK, Next said growth slowed but "not by as much as we expected".
"We believe that sales benefited from higher stock levels than last year, when supplier deliveries were delayed by disruption in Bangladesh and global freight networks," Next said.
Next said the amount of stock in its end-of-season sale was higher than previously anticipated and up 5% on last year. But this was offset by better than expected clearance rates.
The international outperformance came as Next was able to increase profitable marketing expenditure by more than anticipated and through better than anticipated sales through our main European aggregator, Zalando.
Next said cash generation remains strong and it expects to generate GBP474 million of surplus cash for the full-year.
Looking ahead, Next expects pretax profit of GBP1.20 billion in the financial year to January 2027, up 4.5% from the current year, assuming it makes no further acquisitions.
The retailer forecast total sales of GBP7.26 billion for financial 2027, up 4.2%; full price sales of GBP5.86 billion, up 4.5%; and post-tax EPS of 770.4p, up 4.3%.
Next expects cash available for distribution to shareholders, including ordinary dividends, to be GBP768 million.
It said anticipated shareholder distributions, with forecast EPS growth of 4.3%, would deliver a total shareholder return of 9.1%.
Growth is forecast to be lower in the next financial year due to tough UK comparatives, continuing pressures on UK employment, a moderation in international growth and changes in overseas stock availability.
Next is scheduled to announce results for the financial year ending January 31 on March 26.
By Jeremy Cutler, Alliance News reporter
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