Business and consumer confidence has been rocked by Rachel Reeves’ Budget decisions, yet shares in Next (NXT) remain firmly in positive territory year-to-date with the stock trading close to all-time highs.
To retain interest in the story the fashion-to-homewares giant will need to deliver some positive surprises with its full year results, penciled in for 27 March.
Investors will be hoping for signs of improvement in Next’s UK brick and mortar sales, which slipped into negative territory in the nine weeks to 28 December 2024, and counting on continued momentum in overseas online sales, a key growth area for the FTSE 100 retailer these days.
As ever, chief executive Simon Wolfson’s pronouncements on the consumer, the shifting retail landscape and Next’s plans for returning surplus cash will be pored over by investors, who will also be eager for an update on the profit performance of Next’s Total Platform.
On 7 January, the group raised its year-to-January 2025 profit guidance by £5 million to £1.01 billion following better-than-expected festive trading, implying 10% year-on-year growth and admitting the high street stalwart to retail’s billion-pound-profit club.
Over the nine weeks to 28 December 2024, online sales growth accelerated but at the expense of growth at retail stores.
Guidance for the year to January 2026 came in below market expectations, with the company warning it expects UK growth to slow as employer tax increases and their potential impact on prices and employment begin to filter through into the economy.
For the current year, Next forecast full-price sales would rise by 3.5% to £5.22 billion and guided for a 3.6% increase in profit before tax to £1.046 billion with operating cost increases expected to overshadow cost savings.
However, the firm is adept at winning market share, and retail supremo Wolfson is renowned for his conservative guidance, preferring to set expectations low and under-promise then over-deliver on the day.
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