UK's Next Plc beats forecasts with 10.5% Q2 sales surge

Sales outperformed across both the UK and international markets. In the UK, the company attributed the uplift to better-than-expected weather and trading disruption at a major competitor. Internationally, growth exceeded expectations due to more effective digital marketing, allowing for increased investment in profitable campaigns, Next said in a press release.

By business division, Online Next Brand sales in the UK grew 9 per cent in Q2 and 6.8 per cent in the first half (H1). Online Label sales rose by 10.1 per cent in Q2 and 12.6 per cent in H1, while total UK Online advanced by 9.5 per cent in Q2 and 9.2 per cent in H1.

The retail stores delivered a 5.6 per cent growth in Q2 and 5.4 per cent in H1, bringing total UK full price sales growth to 7.8 per cent for the quarter and 7.6 per cent for H1.

Online International continued to outperform, soaring 26.4 per cent in Q2 and 28.1 per cent in H1. This brought total product full price sales growth to 11.1 per cent in Q2 and 11.6 per cent in H1.

Next Finance interest income remained flat in Q2 and edged up 0.5 per cent in H1, resulting in total full price sales growth of 10.5 per cent and 10.9 per cent for the quarter and half year, respectively.

Total full price sales rose 10.9 per cent in H1, led by a 28.1 per cent increase in online international and a 7.6 per cent rise in the UK (retail + online). As a result, the group has upgraded its full-year sales growth forecast from 6 per cent to 7.5 per cent, expecting £5.44 billion in full price sales.

As a result of this robust performance, Next has raised its guidance for second half (H2) full price sales growth from 3.5 per cent to 4.5 per cent, adding £27 million in projected revenue. Consequently, the full-year profit before tax guidance has also been upgraded by £25 million to £1,105 million (~$1,469.65 million).

The company also revised its full-year earnings per share (EPS) guidance upwards to 944.1p pre-tax and 709.0p post-tax, representing increases of 11.7 per cent and 11.4 per cent respectively.

Guidance for UK sales in the second half (H2) remains cautious, with projected growth of 1.9 per cent, reflecting a more challenging comparison base, ongoing economic headwinds, and the one-off nature of Q2 tailwinds. In contrast, the company has raised its H2 forecast for international online sales from 13.1 per cent to 19.4 per cent, driven by enhanced investment in profitable marketing.

The company also noted that share buybacks totalled £81 million in Q1, with no repurchases in Q2 due to share prices exceeding the buyback threshold. In the absence of acquisitions, Next plans to return unspent surplus cash via a special dividend in early 2026.

Profit from the 53^rd week, estimated at £20 million, is excluded from current guidance and will be reported separately at year-end, added the release.

ALCHEMPro News Desk (SG)