Next plc (LSE:NXT) maintained its full-year profit guidance after reporting an 8.1% increase in full-price sales during the third quarter, supported by growth in its international business despite slower trading in the UK.
The British clothing retailer reported that full-price sales for the 13 weeks ended 31 October 2026 exceeded its second-half growth forecast of 5.8% by £33 million.
Next continues to expect full-year profit before tax of £1.26 billion, representing an 8.4% increase compared with the previous year.
International Sales Increase 32.2%
Next’s international full-price sales increased 32.2% during the third quarter, supported by higher marketing expenditure and continued expansion across overseas markets.
The company increased international marketing spending by 67% compared with the corresponding period last year.
The additional sales generated approximately £5 million in incremental profit, although this was offset by higher operating costs, including the impact of new European Union tariffs on orders fulfilled from the UK.
Next expects the net cost of adapting to the tariff changes to reach approximately £5 million during the current financial year, after accounting for other cost savings.
Jefferies noted that the retailer’s international growth helped offset slower UK trading, while returns on its increased marketing expenditure remained broadly unchanged.
UK Sales Growth Slows to 2%
UK full-price sales increased 2% during the third quarter, reflecting a slowdown compared with the first half of the financial year.
Next attributed part of the moderation to unusually warm weather during September, which affected demand for seasonal clothing.
Sales through physical stores declined 1.7%, while UK online sales increased 4.4%.
The figures reflected differing performance between the retailer’s store estate and digital channels, with online growth offsetting the decline in physical retail sales.
Fourth-Quarter Sales Forecast to Increase 5.9%
Next expects full-price sales to increase 5.9% during the fourth quarter.
The forecast includes 2% growth in the UK and a 20.5% increase in international sales.
The company expects overseas growth to moderate compared with the third quarter as it faces stronger comparative figures from the previous year.
For the full financial year, Next forecasts total product full-price sales of £6.03 billion, representing an increase of 7.3%.
Total group sales are expected to reach £7.54 billion, up 7.6% year-on-year.
Full-Year Earnings Guidance Remains Unchanged
Next reiterated its forecast for full-year profit before tax of £1.26 billion, an increase of 8.4% compared with the previous financial year.
Post-tax earnings per share are expected to rise 10.3% to 820.6 pence.
The company maintained its year-end net debt forecast at £815 million.
The unchanged guidance reflects the contribution from international sales growth alongside additional operating costs and more moderate trading conditions in the UK.
Shareholder Returns Reduced Following Head Office Purchase
Next reduced its planned shareholder distributions to £491 million from £535 million after allocating £44 million to purchase its head office complex in Enderby, Leicestershire.
The company expects the property investment to generate an internal rate of return of approximately 8.5%.
Next has returned £355 million to shareholders through share buybacks and intends to allocate the remaining £136 million of its planned distributions to further repurchases.
Additional buybacks remain conditional on achieving a minimum equivalent investment return of 8%.
The retailer continues to balance shareholder distributions with investment opportunities and its existing financial commitments.
More About Next
Next plc (LSE:NXT) is a UK-based clothing, footwear and homeware retailer operating through physical stores, online platforms and international markets. The company sells its own-brand products alongside third-party labels and operates retail, digital and associated business activities in the UK and overseas.
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