Next shares rose on Thursday after the retailer released another encouraging trading update and increased it’s full year guidance.
Next has delivered another strong performance in the first quarter of 2025, surpassing its own sales growth estimates by £55m.
The company reported full price sales growth of 11.4% for the thirteen weeks to 26 April 2025, considerably higher than their original forecast of 6.5% growth.
The retailer attributed much of this impressive performance to the favourable weather conditions during the period, which particularly boosted sales of summer fashion lines.
The surge in spending has prompted Next to raise its full-year profit forecast by £14 million to £1,080 million, representing a 6.8% increase compared to the previous year.
“Next continues to deliver for investors, with yet another profit upgrade continuing its hot streak. Sales over its first quarter were well ahead of expectations, nearly double the group’s forecasts,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“In the UK, both online and in-store sales powered higher at mid-single digits. There had been some weakness from in-store sales of late, but it looks like the better weather has convinced shoppers to head to stores to try before they buy.”
Despite a note of caution that the weather-induced strong performance of Q1 would not be continued throughout the year, Next shares jumped over 1% in early trade on Thursday.
Next’s online sales
Next online sales growth is certainly gathering pace. Next’s UK online business grew by 8.9%, with the LABEL UK platform—which hosts third-party brands—showing eye-catching growth of 15.7%.
Most impressive was the international online segment, which surged by 29.6%, highlighting the company’s successful expansion beyond British borders.
Despite the challenging high street environment that has troubled many retailers in recent years, Next’s physical retail shops also performed reasonably, with sales increasing by 5.2%.
Looking ahead, Next management expressed caution about the second half of the financial year, noting that comparative figures from Autumn Winter 2024 present a higher benchmark. Additionally, they anticipate that the full effects of April’s National Insurance increases will begin to impact consumer spending in the latter part of the year.
The retailer’s updated guidance for the full year now anticipates total sales growth of 6%, up from the previous forecast of 5%. This translates to expected total group sales of £6.6 billion and pre-tax earnings per share growth of 10%.
Next also confirmed its ongoing share buyback programme, having purchased £81 million of shares to date, with plans to buy back a total of £316 million during the financial year, subject to share price conditions. The company has set a buyback limit of approximately £116 per share, based on its latest profit guidance.