In a remarkable turn of events, British retail powerhouse Next has announced that its annual profits are expected to surpass £1.1 billion, following a staggering 5.9% increase in UK sales during the nine-week period leading up to 27th December. This impressive performance has prompted the company to revise its profit forecast upwards by £15 million, marking the fourth such upgrade in the past eight months.
The FTSE 100 company, which boasts a diverse portfolio of brands including Gap, Victoria’s Secret, Reiss, and Joules, attributed its strong sales to higher stock levels compared to the previous year, when deliveries were disrupted by issues in Bangladesh. The company also reported a better-than-expected end-of-year performance, with £30 million more in sales than initially predicted.
Overseas, Next’s sales have also exceeded expectations, rising by 38% compared to the 24% growth it had forecast, as the company increased its marketing spend and expanded its partnership with the online specialist Zalando.
This robust performance has sparked hope for the wider UK fashion retail sector, which was thought to have struggled amid a warm autumn and early winter, as well as high energy and food bills weighing on household budgets. However, analysts caution against reading too much into Next’s success, suggesting that it may be an outlier in the industry.
John Stevenson, a retail analyst at Peel Hunt, noted that Next’s strong trading update “does not set the tone for the wider sector, particularly given the strength of overseas revenue.” He praised the company’s retail model, which combines a slick online service offering a broad array of brands with a wide network of high street stores.
Looking ahead, Next has warned that growth in the next financial year will be slower, at 4.5%, as it expects “continuing pressures on UK employment” to filter through into the consumer economy. The company also cited one-off factors, such as a very sunny summer and the online shutdown of rival Marks & Spencer for over six weeks after a cyber-attack, as contributors to its exceptional performance in 2025.
Despite these cautious projections, Next’s shares were among the biggest risers on the FTSE 100 on Tuesday, climbing 2% and helping to propel the blue-chip index to a record high.
