Next shares rose on Thursday after the retailer once again defied the gloom surrounding the UK economy, with international sales growth matching the UK on a cash basis.
Next reported another strong year with group pre-tax profits of £1.158bn, up 14.5%, while earnings per share surged 17%, beating its own guidance by £8m thanks to strong full-price sales in January and better-than-expected clearance rates.
Full-price sales rose 10.9% across the year to January 2026, with total group sales up 10.8% to just over £7bn.
“Next lifted profit guidance five times during its financial year. So, in many ways, today’s results merely confirm what we already knew. International growth, online strength and steady brick-and-mortar sales delivered a 2025/26 ahead of anyone’s expectations,” said Freetrade analyst Duncan Ferris.
International sales produced the strongest growth on a percentage and cash basis, with overseas sales up 35% and contributing £297m in cash growth.
The UK still delivered growth, with domestic sales rising 7% and adding £254m in cash terms. Third-party brands and wholly-owned labels both grew strongly alongside the core NEXT brand.
Looking ahead, Next is guiding for full-price sales growth of 4.5% and pre-tax profit of £1.21bn in the current year, up £8m from its January guidance on the back of the stronger base. But if history is any guide, investors should expect Next to beat these forecasts. They have a form for under-promising and over-delivering.
“Looking to 2026/27, pre-tax profit growth was always likely to simmer from last year’s level. But add a global spike in oil prices, and Next only expects pre-tax profits to grow by 4.5% this year, below market forecasts heading into results,” explained Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“The Middle East accounts for around 6% of the group’s sales, and the conflict is likely to restrict growth in the region. For now, Next assumes three months of disruption, bringing £15mn of additional costs which it’s been able to offset elsewhere in the business. But if the conflict drags beyond this point, we could see higher prices passed on to consumers.”
The retailer returned £839m to shareholders through a combination of dividends, buybacks and its B Share Scheme capital distribution. The company expects to return £500m to shareholders in the year ahead.