Next raises full year profit outlook
Following a strong Christmas trading period, the British fashion retailer has raised its profit before tax forecast for the current financial year by 5 million British pounds to 1.010 billion British pounds
In the nine weeks to the 28th of December, Next delivered full price sales growth of 6.0% over the same period last year, driven by a strong Christmas trading period. Adjusted for this timing, underlying full price sales - the company’s preferred measure, which excludes exceptional and other one-off items - were up by 5.7%, as compared with the previous guidance for the period of a 3.5% increase.
The UK retailer highlighted that UK growth in the period was in line with the rest of the year (up by 2.5% year-on-year), but online sales growth (6.1% year-on-year) increased at the expense of retail growth (down by 2.1% year-on-year). In addition, oversee sales (up by 31% year-on-year) unexpectedly accelerated in the run-up to the Christmas.
The over-achievement added 27 million pounds (32.2 million euros) to full price sales and increased the company’s full year profit before tax guidance by 5 million (6.0 million) to 1.010 billion British pounds (1.20 billion euros). Therefore, the group’s profit before tax is now estimated to grow by 10% and pre-tax earnings per share (EPS) will be up by 11.5%.
Fiscal 2026 Guidance
For the year ending January 2026, Next forecasts full price sales growth of 3.5% year-over-year and profit before tax of 3.6% year-over-year to 1.046 million British pounds (1.25 billion euros).However, Next warned that it was cautious about its sales outlook both in the UK and overseas. In fact, Growth in the UK is likely to slow as higher employer tax costs start to feed through to the economy, while overseas growth will moderate after previously benefiting from a boost in marketing spend.
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Image Credits: nextplc.co.uk