Strong online and overseas trading pushed the fashion and homeware giant to beat its own upgraded expectations, again.
Next (LSE: NXT) shares climbed on Thursday after the retailer raised its full-year profit guidance for the second time in as many weeks, with first-half trading running well ahead of its own forecasts both at home and abroad.
The group reported pre-tax profit of £569m for the six months to July, up 10.5% year-on-year, as group sales rose 9% to £3.54bn. Full-price sales grew 7.7%, comfortably outpacing the guidance set back in March, while earnings per share rose 12% and the net margin ticked up to 16.1%. Shares were up 1.5% at the time of writing.
The gains were driven by online and international momentum rather than the shop floor: UK online sales rose 7.4% and overseas full-price sales jumped 17%, more than offsetting a 1.7% decline in physical retail stores. Next's stable of owned and licensed brands beyond the core Next label also grew sharply, up 32% online in the UK and 82% overseas, and now makes up 9% of full-price sales at similar margins to the flagship brand.
Management pointed to two unusually warm summers and heavier digital marketing spend as tailwinds, alongside a 24% expansion in its international direct-to-consumer arm. The company also flagged early trials of 'agentic' AI tools within its technology teams, which it said could significantly speed up software development and review work.
On the back of the half-year performance, Next lifted its full-year pre-tax profit guidance by £12m to £1,255m, citing slightly stronger sales assumptions and further cost savings in its warehouse operations. Analysts noted the retailer's habit of setting conservative targets and then beating them, a pattern likely to keep investor attention on whether a fifth upgrade follows before the year is out.
This report is based on Next’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full markets calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Clark Street Mercantile on Unsplash.
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