Retailer’s full-price sales jumped 10.6% in the final quarter, driven by strong online and international growth
High street mainstay Next saw its share price surge in early trading on Tuesday, following a bustling Christmas shopping period that boosted sales. The group’s share price climbed as much as 3% to 2.8 per cent to 14,000 pence, with shares increasing by 14.8 per cent over the past six months.
During the final quarter, full price sales rose by 10.6 per cent compared to last year, surpassing expectations of seven per cent. Adam Vettese, market analyst for eToro, said: “Next has delivered another resilient Christmas performance, underscoring its position as one of the UK high street’s strongest operators.
“Much of this quality story is already reflected in the share price after a strong run over the past year, which leaves less room for error if consumer demand softens.”
UK sales also exceeded previous expectations of 4.1 per cent, reaching 5.9 per cent, driven by increased online shopping and higher stock levels. However, retail stores continued to struggle with low footfall, with just 1.4 per cent of sales coming from physical shops.
International sales soared an impressive 38.3 per cent, outperforming guidance of 24.3 per cent. The FTSE 100 company attributed this overperformance to increased marketing expenditure and the performance of its European partner Zalando, as reported by City AM.
The surge in shoppers generated £51m in profit, leading the group to raise its guidance by £15m to £1.15bn, a year-on-year increase of 13.7 per cent, marking the third profit upgrade in over five months.
Next has also repurchased £131 million of shares at average prices of £109 million, reducing the number of net shares by 1%, and expects to have approximately £768 million available for shareholder distribution in the next financial year.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Next’s Christmas trading update gave investors plenty to be jolly about, capping a solid year 2025 for the UK fashion powerhouse.
“Unwrapping some of the headline figures, sales growth continues to be driven by its online channel, which already accounts for more than half of group sales.
“Within that, overseas sales have continued to grow at an eye watering pace.”
Despite the robust Christmas trading period, the group anticipates more modest growth in the next financial year, expecting total product sales to increase by just 4.8%.
The group has attributed this decline in expectations to favourable summer weather, competitor disruption and improved stock levels bolstering sales in 2025.
The company also anticipates that ongoing pressures on UK employment will dampen consumer confidence, with UK sales forecast to rise by only 1.6%.
International sales are expected to increase by 16.5%, with the group considering it unlikely to raise its marketing expenditure as much in the next financial year, whilst the rise in stock availability is not predicted to occur again. In the year leading up to January 2027, it anticipates generating a surplus cash of £417m after tax, with plans to increase its net debt by £777m.
Despite Next’s pessimistic UK outlook, analysts remain optimistic about the store’s performance, attributing this to its history of “under-promising and over-delivering”. Mr Chiekrie said: “With Next’s track record of under-promising and over-delivering, this growth target looks a touch conservative. Next remains one of the brightest sparks in the UK retail scene, and there’s potential for more success if it can continue nailing its overseas expansion.”
