Next lifts full-year profit outlook after strong Christmas trading

Core Viewpoint - British fashion retailer Next has raised its profit forecast for the year ending January 2026 due to stronger-than-expected full-price sales during the Christmas trading period [1] Group Performance - Full-year profit before tax guidance has been increased by £15 million ($20 million) to £1.15 billion, reflecting a year-on-year increase of 13.7% [1] - In the nine weeks to 27 December, full-price sales rose by 10.6% compared to the previous year, surpassing the earlier guidance of 7.0% [1] Sales Breakdown - International online sales surged by 38.3%, while UK sales increased by 5.9% [2] - Total UK full-price sales have increased by 6.6% year-to-date, with online channels outperforming physical stores [4] Future Outlook - For the year ending January 2027, full-price sales are expected to grow by 4.5%, with group profit before tax forecast at £1.20 billion, also up 4.5% [2] - The financial year ending January 2026 is a 53-week year, contributing an estimated £22 million to profit before tax and approximately £20 million to cash flow [6] Shareholder Returns - Cash available for distribution to shareholders is projected at £768 million, equivalent to 4.8% of the group's current market capitalization [3] - Anticipated shareholder distributions, combined with forecast EPS growth of 4.3%, imply a total shareholder return of 9.1% [3] Factors Influencing Growth - International growth was supported by higher-than-anticipated marketing spend and stronger sales through European aggregator Zalando [5] - The volume of stock in the end-of-season sale was 5% higher than last year, but stronger clearance rates added £30 million to group sales guidance while remaining profit neutral [5] - Looking ahead, growth is expected to moderate due to tougher UK comparatives and easing overseas growth [6]