Next plc (LSE:NXT) has upgraded its full-year outlook after delivering stronger-than-expected second-quarter trading, with full-price sales increasing 9.2% compared with the same period last year. The performance comfortably exceeded the retailer’s forecast of 4.0%, supported by continued international expansion, resilient demand in the UK and higher returns from marketing investment than originally anticipated.
The company now expects full-price sales for the year to reach £6.0 billion and pre-tax profit to total £1.243 billion. Management has also expanded its share buyback programme, using surplus cash to enhance shareholder returns while maintaining its expectation of 5.0% sales growth for the remainder of the financial year.
International Growth Continues to Outperform
International online sales rose 36.9% during the second quarter, helping lift total first-half full-price sales growth to 7.7%. While overseas operations continued to deliver strong momentum, sales through UK retail stores remained comparatively subdued.
Next plans to return approximately £524 million to shareholders through share repurchases, with buybacks continuing while they are expected to generate an equivalent return of at least 8%. Management also indicated that any excess cash not used for buybacks could be distributed through special dividends or other capital return measures, reflecting its disciplined approach to capital allocation.
Earnings Guidance Increased as Buybacks Reduce Share Count
The retailer expects UK sales growth during the second half to moderate to around 2.8%, broadly in line with recent trading trends. International growth is forecast to ease to approximately 14% as the business compares against exceptionally strong growth achieved last year following a step change in European aggregator sales.
Next has also increased its earnings per share guidance to reflect the ongoing reduction in shares outstanding resulting from its buyback programme. Investors can expect a further trading update when the company releases its interim results on 17 September 2026.
Although short-term technical indicators remain relatively weak, the company’s outlook continues to be supported by healthy profitability, strong cash generation, improving leverage and an attractive valuation.
About Next plc
Next plc is a leading UK retailer specialising in clothing, footwear, accessories and homeware. The company serves customers through a combination of online platforms, physical retail stores and partnerships with third-party brands, while also operating an expanding international e-commerce business.
In addition to its retail operations, Next provides consumer finance through NEXT Finance, supporting customers in the UK and overseas. The group’s long-term strategy focuses on sustainable growth, disciplined capital allocation and expanding its international presence while maintaining strong returns for shareholders.
Leave a Reply