Next Defies High Street Gloom With Bumper Christmas Sales

Next, the familiar high street giant, is set to smash its annual profit forecasts, expecting to top an impressive £1.1 billion after a Christmas trading period that far outshone expectations. This comes as a welcome surprise for the clothing and homewares retailer, which has now upgraded its profit outlook for the fourth time in just six months. The FTSE 100 company revealed a robust 5.9% increase in UK sales during the nine weeks leading up to 27 December, significantly higher than the 4.1% growth it had initially predicted. This strong performance was partly attributed to better stock levels compared to the previous year, when supply chain issues in Bangladesh caused delays. Shoppers also flocked to its end-of-year sale, contributing an extra £30 million beyond what was expected. For the full year, ending in January, Next now anticipates sales to climb by 10.7% to £5.6 billion, with pre-tax profits surging by 13.7% to £1.15 billion. These figures represent a healthy bump from earlier predictions, highlighting the company's resilience in a challenging market. Even its international operations saw stronger-than-anticipated growth, with sales up 38% thanks to increased marketing and a partnership with online specialist Zalando. This positive news from Next offers a glimmer of hope for the broader UK fashion retail sector. Many retailers have reportedly struggled through a mild autumn and early winter, all while households grappled with rising energy and food bills. Indeed, recent data suggested UK fashion sales actually fell by 1.4% in the four weeks to 7 December, and fears for the sector were heightened this week with two other retailers, Claire’s and The Original Factory Shop, reportedly on the brink of administration. However, Next isn't completely without caution. The company has warned that the next financial year, 2026, will likely see slower growth, forecasting a 4.5% increase. This slowdown is expected as "continuing pressures on UK employment are likely to filter through into the consumer economy as the year progresses." Next also acknowledged that its exceptional performance in 2025 benefited from some one-off factors, including a very sunny summer and a period when rival Marks & Spencer's online operations were disrupted by a cyber-attack. Looking ahead, the retailer expects its overseas online growth to moderate as it won't be boosting marketing spend as aggressively, and many of its operational improvements to make more products available online have now been completed. So, while Next has certainly enjoyed a festive season to remember, it's keeping a watchful eye on the economic horizon. --- Managing your business finances? TaxAce provides smart online accountancy services for UK businesses with flexible monthly plans. Image and reporting: https://www.theguardian.com | Read original article