Next has become only the fourth UK retailer in history to post annual pre-tax profits exceeding £1 billion, joining the ranks of Tesco, Marks & Spencer, and Kingfisher.
The FTSE 100-listed fashion and homewares giant reported a profit of £1.01 billion for the year to 25 January — up 10.1 per cent on the previous year — and raised its guidance for the year ahead.
Shares in Next jumped as much as 9.55 per cent in early trading on Thursday to £109.40 after the group increased its profit forecast by £20 million to £1.066 billion, citing stronger-than-expected full-price sales at the start of the financial year. Full-price sales in the first eight weeks of the year were up 5 per cent, prompting the group to revise its full-year sales forecast from 3.5 per cent growth to 5 per cent.
However, Next cautioned that it was not increasing forecasts for the second half of the year, pointing to tougher comparisons and concerns about the impact of upcoming tax rises. The company expects April’s planned increases to National Insurance contributions and the minimum wage to weaken the UK jobs market and dent consumer confidence later in the year.
Next’s strong performance has been buoyed by a 5.8 per cent rise in full-price sales and successful acquisitions of premium brands including Reiss and FatFace. Total group sales rose 8.2 per cent to £6.3 billion — slightly ahead of analyst expectations.
Chief executive Lord Wolfson of Aspley Guise, who has led the business since 2001, remained upbeat despite warning signs in the wider economy. “We are as positive about the company today as we were this time last year,” he told investors, “albeit in an environment where the risks to the wider UK economy are growing.”
Wolfson — the FTSE 100’s longest-serving chief executive — has been widely credited with steering the business through a period of rapid transformation, navigating challenges from the cost of living crisis, rising inflation, and the shift to e-commerce that has claimed many high street casualties.
This marks the ninth time in two years that Next has raised its profit forecast, reinforcing Wolfson’s reputation as a leader who under-promises and over-delivers. But even with record profits, the company is not immune to mounting cost pressures. In January, Next confirmed it would raise prices by 1 per cent this year to help offset a projected £67 million rise in wage costs by January 2026, driven by the government’s tax and wage policy changes.
Internationally, the retailer expects overseas sales growth to ease from 24 per cent to around 20 per cent, as it scales back marketing spend in markets such as Saudi Arabia, Australia and the US.
Next, which operates 458 UK stores, has continued to outperform in a challenging retail landscape. While rival JD Sports was once considered neck-and-neck in the race to hit the £1 billion profit milestone, it pulled back its forecasts in January after weaker-than-expected Christmas trading.
With shares up nearly 20 per cent over the past 12 months and early trading reflecting investor confidence, Next remains a standout success story on the high street — but with growing pressure on costs, taxes and consumer demand, the retailer knows the path ahead may be less smooth.
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Next profits top £1bn for the first time, but retailer warns of tougher year ahead