Next, a prominent British retailer specializing in clothing, footwear, and home products, has announced an optimistic projection for fiscal 2026 after revising its earnings guidance upward for the previous year. This adjustment is primarily driven by robust sales during the Christmas shopping period and an unexpected surge in international demand. For the fiscal year ending January, Next anticipates a pretax profit of £1.01 billion, surpassing its previous estimate by £5 million.
The expected earnings per share (EPS) for the year stand at £8.438 pretax and £6.354 post-tax, a slight increase from earlier forecasts of £8.393 and £6.324, respectively. These revised expectations represent a 10% annual growth in group pretax profit and an impressive 11.4% increase in pretax EPS.
Furthermore, total group sales for fiscal 2025 are projected to reach £6.30 billion, well above the prior guidance of £6.27 billion. This positive outlook follows a year-over-year growth of 6% in full-price sales over the nine weeks leading up to December 28, 2024. Stock levels for the end-of-season sales increased by 13% compared to the same period last year, exceeding the growth rate for full-price sales.
Notably, international sales growth accelerated unexpectedly as the holidays approached, primarily driven by online transactions, while growth within the UK remained consistent with performance trends observed throughout the year. Despite this favorable news, Next has cautioned that international sales growth is expected to slow to 14% in fiscal 2026, down from 24% in fiscal 2025.
This moderation is attributed to the inability to sustain the heightened marketing expenditures observed in international markets this year. The retailer is also taking a vigilant approach regarding growth prospects in the UK and the potential impact on consumer shopping behaviors. Looking ahead to fiscal 2026, Next projects a group pretax profit of £1.05 billion, with EPS of £9.002 pretax and £6.760 post-tax.
Total group sales are anticipated to rise to £6.50 billion. "Approximately 85% of NEXT's sales are derived from the UK, making it significantly dependent on the UK consumer outlook and a potentially softer employment landscape. However, the company possesses a relatively ample margin for error," noted RBC Capital Markets.
"Next has promising opportunities to further expand its high-return Total Platform business for other brands, capitalizing on its strong infrastructure, online warehousing, and distribution capabilities." Notably, shares of Next experienced an increase of over 3% during midmorning trading sessions..