Next lifts annual profit outlook as full-price sales surge in Q3 2025

Core Viewpoint - Next has raised its full-year profit guidance following a stronger-than-expected increase in full-price sales for Q3 2025, now anticipating a pretax profit of £1.135 billion ($1.52 billion) for the year ending January 2026, up from a previous estimate of £1.105 billion and exceeding the £1.011 billion recorded in 2024/25 [1] Group 1: Sales Performance - Full-price sales for the 13 weeks ending October 25 rose by 10.5%, outperforming the guidance of 4.5% by £76 million [1] - UK sales increased by 5.4%, surpassing the target of 1.9% but slower than the 7.6% growth in the first half of the year [2] - International sales surged by 38.8%, exceeding the forecast of 19.4% and also ahead of the 28.1% growth reported in the first half [2] Group 2: Future Guidance - Next has raised its fourth-quarter sales growth guidance from 4.5% to 7%, adding £36 million to its forecast [2] - For Q4, UK sales growth is expected to ease to 4.1%, while international online sales growth is projected to slow to 24.3% [4] Group 3: Operational Insights - Improved stock availability in the UK compared to 2024, when deliveries were affected by supply issues and global freight constraints [3] - International growth was bolstered by a 50% increase in digital marketing spend, compared to a previous guidance of 25% [3] Group 4: Financial Management - The company expects to generate approximately £425 million of surplus cash in 2025 [4] - After returning £131 million via share buybacks, Next plans to distribute the remaining surplus through a special dividend of £3.10 per share at the end of January 2026, assuming no additional acquisitions or buybacks [4] Group 5: Dividend Information - An interim dividend of 87 pence per share will be paid on January 5, 2026, with the next trading update scheduled for January 6, 2026 [5]