Next shares hit record highs on Thursday after posting another set of strong full-year results, as the group navigated softer economic conditions to produce higher sales and profit.
There’s no stopping Next. Neither the momentum in sales nor its shares.
As competitors went into administration and closed their doors over the past decade, Next continued to grow through a carefully executed plan to increase online sales and better customers’ in-store experience.
The cost of living crisis and tensions in the Middle East have been blamed for soggy sales elsewhere in the sector. Not so at Next.
“We’ve heard of many retailers having to contend with disruption to shipping due to geopolitical tension but Next has said this will not be a significant factor,” said Adam Vettese, analyst at investment platform eToro.
“This is good news for shareholders but more importantly Next will continue to funnel cash back to them in the form of dividends and share buybacks as they have done consistently in recent years.”
Total group sales increased 5.9% in the year to January 2023 and profit before tax rose 5%. It isn’t explosive growth, but it’s steady and increasingly reliable.
Next has grown the business over the years by acquiring complementary companies, and the acquisition of Reiss has delivered a non-cash gain of £109m.
“Next appears quietly confident for the year ahead. Shrewd acquisitions and investments have improved its growth prospects, while moderating inflation has significantly reduced pressure on costs. And while the UK economy isn’t out of the woods, the economic tea leaves don’t read as grimly as at this stage last year,” said Charlie Huggins, Fund Manager at Wealth Club.
Investors cheered full-year results, and shares jumped 2.9% in early trade. Next shares have gained 26% over the past year.
