Next raises outlook as FY profits top record £1bn
Following a strong start to the year, the group said it is upgrading its annual pre-tax profit guidance by £20m to £1.06bn, an increase of 5.4%
Next has reported that pre-tax profits have risen by 10.1% to £1bn for the first time in its history, with the group raising its full-year guidance for the coming year amid further strong trading.In the year to January 2025, full price sales rose by 5.8% while total group sales were up by 8.2% to £6.3bn, which the group attributed to the acquisitions of Reiss and FatFace that completed towards the end of 2023/24.
Online sales rose by 4.6% over the period, while online UK profit rose by 8% to £444m. However, total retail sales dipped by 0.9%, while full-price sales were down by 1.1% against last year.
The group noted its overseas third-party distribution networks have allowed its international websites to grow their sales by 350% over the last ten years, while sales through third-party platforms grew by 36% last year and now account for 30% of its international business.
Following a strong start to the year, the group said it is upgrading its annual pre-tax profit guidance by £20m to £1.06bn, an increase of 5.4%.
It comes as Next lifted its half-year guidance for full price sales by 6.5%, up from 3.5%, resulting in sales for the full year being up by 5.0%, also up from 3.5%.
According to the group, the sales upgrade adds £72m of sales, of which £38m comes from the UK and £34m from international trade.
The group declined to provide guidance for the second half as last year it was “much stronger than the first, so the comparative numbers get tougher as we move into the second half”.
It added that it expects the UK tax rises next month to weaken the UK employment market and “negatively impact consumer confidence as the year progresses”.
In its annual trading update, the group said: “There has been quite a lot of comment, both within and outside the group, about Next passing the £1bn profit mark. To some it may seem an important milestone, even a cause of celebration. We do not share that view, not least because profits can go down as well as up.
“In fact, we think it would be a big mistake to view the company differently just because it has passed any milestone. The pitfalls of being overly impressed with this number are worth discussing, because they go to the heart of what a business is for, and the type of business we strive to be.”
They added: “Reaching any level of profit cannot be used as an excuse for being less demanding in our approach to running the business. We can be no less rigorous in the control of costs and maintenance of margins, any less demanding in terms of return on capital or less disciplined in the way we allocate capital.”
