- Next’s full-price sales rose 5.7% on a comparable basis in the 9 weeks to 28 December.
- Completes £326mn of share buybacks.
- Full-year pre-tax profit guidance upgraded by £5mn to £1,010mn.
Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
“Next’s Christmas trading update gave investors plenty to be jolly about. In the nine weeks to 28 December, full-price sales rose 5.7% higher on a comparable basis, well ahead of the group’s previous guidance for 3.5% growth. The better-than-expected finish to 2024 has led the fashion group to upgrade profit guidance once again. Full-year pre-tax profits are now expected to come in £5mn higher at £1,010mn, marking the fourth profit upgrade in a little over five months.
Unwrapping some of the headline figures, revenue growth came entirely from the online channel, where sales growth is accelerating. Overseas sales are growing at an eyewatering double-digit pace, helping to offset a small decline in its retail stores which have come under a bit of pressure given the structural decline of the high street. End-of-season sales have delivered as expected and helped clear surplus stock, and inventory piles are sitting at a comfortable level heading into the new year.
Next also gave a sneak peak into its outlook for the new financial year, with pre-tax profits expected to grow 3.6% to around £1,046mn. This looks a little conservative, especially given Next’s track record of outperforming its own guidance. But overseas growth is forecast to ease, and wage inflation and National Insurance increases are set to bring around £67mn of additional costs to cover, so erring on the side of caution is a smart move, and leaves potential for positive surprises.”
