Even though the economy is bad right now, clothing and home goods store Next (NXT) has done very well, which is why its sales and profit projections have been raised.
Next stock went up 7.5% to £107.20 after the company said it had made more than £1 billion in yearly pre-tax profit for the first time. After a good start to the new fiscal year, the group raised its sales and profit goals for the current year.
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Next’s sales and profits for the year ending in January 2025 were higher than expected thanks to a strong last month of the year. The company’s total sales went up by 8.2% to £6.32 billion, and its adjusted pre-tax profit went up by 10.1% to £1.01 billion.
Instead of expecting 3.5% growth in full-price sales for the year finishing in January 2026, Next’s CEO Simon Wolfson raised that number to 5%. Along with that, they raised their pre-tax earnings forecast by £20 million to £1.066 billion because sales in the first eight weeks of the new fiscal year were better than expected.
It’s important to remember that this upgrade is based on better sales expectations for the first half of the year. For the second half, the guidance hasn’t changed. This cautious approach comes from worries about a tougher comparison in the second half of the year and possible tax hikes in the UK in April, which could hurt the job market and shopper confidence.
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Shore Capital said, “Next continues to defy gravity with its performance, even though the macroeconomic problems are well known.”
In their sales predictions, they saw a rise in online sales both in the UK and around the world. This shows how well Next’s multichannel and global approach to growth works.
AJ Bell’s investment director, Russ Mould, said that Next’s plan to give customers a wider range of goods is working. Next sells both its own goods and those made by other companies. This gives customers more choices.
Next’s website also has goods from other companies, which helps people find what they’re looking for without having to look elsewhere.
Mould said, “The foundations have been laid and the strategy is moving along nicely.” “Next up is how to speed up sales and become a bigger player in the global retail market.” To do this, online services, delivery, marketing, and connections with third-party sellers will need to be improved. It’s not as simple as it sounds. To make Next more well-known around the world, a lot of hard work is needed.
Mould also said that Next is better prepared than many of its competitors to deal with problems in the market because it is in a strong situation. Some companies might have a hard time, but Next might get more of the market. The important thing is to keep profits from dropping too much, which is hard to do because of outside forces.
Julie Palmer from Begbies Traynor said that Next’s size should help it deal with higher taxes, but there will still be worries about the future of its shops, especially since a number of well-known ones have closed recently. Since Next’s UK retail business was the only one to report bad results, the market will be very interested in seeing if this once-strong brand can get back on track or think about cutting back on its physical presence.
