Next Plc (LON:NXT) has reported an impressive 7.6% increase in full-price sales for the third quarter, exceeding its previous forecast by 2.6%. This success was fuelled by a surge in demand for winter collections, attributed to the early arrival of colder weather. UK Online sales led the charge with a robust 7.9% growth, and Overseas saw an impressive 20.4% boost. Even UK Retail, which had faced challenges in recent quarters, returned to growth with a 2.9% increase.
Reflecting on these results, the Shore Capital team, led by analysts Clive Black and David Hughes, commented, “Next now humbly gives credit, citing the earlier descent into the winter chill boosting demand for Autumn/Winter ranges, particularly versus the clement September and October enjoyed last year.” The analysts also highlighted that while the brand benefited from weather-driven demand in Q3, Next remains cautious about the months ahead. As a result, it has made a conservative adjustment to its full-price sales guidance for Q4, setting it at 3.5%.
Next’s ability to outperform in a challenging market is underscored by its updated forecast for FY25, which projects an adjusted profit before tax (Adj. PBT) of £1.05 billion—up from £995 million. This also places it ahead of the £990 million consensus forecast. “Current guidance sees its Adj. PBT breaking through the £1bn mark for the first time,” say Black and Hughes, underscoring the company’s resilience in the face of higher taxes and ongoing economic uncertainty. Next anticipates a year-end EPS growth of 9.3%, with a full-year sales increase of around 5%.
Shore Capital analysts attribute Next’s success not only to favourable conditions but also to its strong management and enduring brand value, which continue to support its premium valuation. For investors, the brand’s steady performance is reassuring, with Next currently valued at 2.0x EV/Sales and 15x PER for CY25F.
In Summary
With Next plc adapting well to external conditions and steadily achieving growth in both online and physical retail spaces, the brand is poised for what could be one of its strongest years yet. As Black and Hughes highlight, “this is shaping up to be an excellent year for Next plc,” reflecting its ability to navigate and thrive despite broader retail challenges. This performance underscores both the strength of Next’s leadership and the lasting appeal of its brand as it moves into the final months of the year.
