Next shrugs off global turmoil as sales surge across markets

Next has raised its profit outlook for the second time this year after stronger-than-expected sales growth, with warmer weather and a release of pent-up demand in overseas markets helping the high street retailer outperform forecasts.

The fashion and homeware group said full-price sales rose 9.2 per cent in the 13 weeks to August 1 compared with the same period last year, more than double the 4 per cent increase it had previously predicted.

The performance prompted Next to lift its full-year pre-tax profit forecast by £25 million to £1.24 billion, representing growth of 7.3 per cent compared with the previous year.

The retailer said stronger trading was partly driven by a warmer-than-expected UK summer, which encouraged consumers to refresh their seasonal wardrobes. The company also benefited from increased investment in marketing campaigns that generated higher returns.

Domestic sales rose 2.8 per cent during the quarter, although the growth was driven primarily by online shopping as sales from physical stores declined. International online sales were a standout performer, surging 37 per cent year-on-year.

Next said overseas markets, particularly the Middle East and Northern Europe, experienced a rebound after a weaker start to the year, as consumers released spending that had previously been delayed.

The recovery comes despite disruption caused by the Iran war, which has affected trading conditions in parts of the Middle East, a region accounting for roughly 6 per cent of Next’s annual sales. Chief executive Lord Simon Wolfson previously said the company planned to increase prices in some overseas markets by up to 8 per cent to offset rising costs.

Julie Palmer, managing partner at advisory group BTG, said Next had shown resilience despite supply chain pressures and wider geopolitical risks.

“Even as the heatwave has seen retail footfall drop, Next has bucked the trend with resilient overall sales,” she said.

The retailer’s latest upgrade highlights the contrast between Next’s performance and the broader challenges facing UK consumers, with high borrowing costs and inflation continuing to weigh on household finances.

For investors, the results reinforce Next’s reputation as one of the UK’s strongest retail operators, combining a powerful online platform with disciplined cost control at a time when many high street rivals continue to struggle.