Next raises full year profit outlook following strong second quarter sales

UK clothing retailer Next plc (Next) has upgraded its full year pre-tax profit guidance after second quarter full price sales outperformed internal forecasts. Full price sales for the 13 weeks to August 1, 2026 rose 9.2 percent compared to the same period in the prior year, exceeding the company’s expectation of 4 percent.

The Leicester-based group attributed the over-performance of 70 million pounds in sales to a combination of warm summer weather in the UK, a release of pent-up consumer demand in Northern Europe and the Middle East following a softer first quarter, and increased expenditure on marketing campaigns.

Following the Q2 momentum, Next increased its full year group pre-tax profit guidance by 25 million pounds to 1.24 billion pounds, representing a 7.3 percent increase compared to the previous financial year. The guidance adjustment incorporates a 15 million pound profit contribution from additional full price sales alongside a 10 million pound increase in projected returns from its equity investments.

International online demand drives second quarter momentum

Across business divisions, total online international sales experienced strong momentum during Q2, expanding 36.9 percent compared to the prior-year period. For the first half of the financial year, covering the 26 weeks to August 1, 2026, international e-commerce sales rose 23.9 percent.

Performance across domestic operations remained lower:

UK online Next brand: Q2 sales declined 1.2 percent, bringing first half growth to 2.1 percent.

UK online Label: Q2 sales expanded 13.2 percent, yielding a first half increase of 14.4 percent.

Retail stores: Q2 sales fell 0.3 percent, resulting in a first half decline of 1.7 percent.

Total UK: Q2 total sales across physical retail and e-commerce rose 2.8 percent, bringing first half growth to 3.6 percent.

Total product full price sales for Q2 grew 9.7 percent, while interest income from Next Finance rose 0.9 percent.

Reaffirmed second half sales guidance and capital allocation plans

For the second half of the financial year, Next maintained its full price sales forecast of 5 percent growth compared to the prior year. Domestic sales growth across retail stores and e-commerce is expected to remain consistent with Q2 levels at 2.8 percent.

International sales growth is projected to moderate to 14 percent in the second half due to tougher comparative figures from the prior-year adoption of Zeos distribution services, which elevated European inventory availability starting in August 2025.

For the full 2026/27 financial year, total group sales, incorporating markdown items, equity investments, and subsidiary revenues, are projected to reach 7.50 billion pounds, reflecting a 6.6 percent increase. Post-tax earnings per share are forecasted to reach 812.90 pence, up 9.2 percent.

The retailer’s earnings per share guidance assumes the completion of 524 million pounds in share buybacks during the year, an increase of 14 million pounds over previous estimates. To date, Next has deployed 355 million pounds toward share repurchases at an average share price of 127.69 pounds, reducing its total shares in issue by 2.3 percent.

The company plans to return any unallocated surplus cash to shareholders through a capital return or special dividend if share buyback return metrics are not met. Next will publish its detailed first half financial results on September 17, 2026.