Next lifts profit and sales targets after strong second-quarter trading
Key Takeaways
- •Next raised its 2026 pre-tax profit target to £1.24bn, about £25m above its previous estimate.
- •The company increased its total sales target to £7.5bn from £7.3bn after second-quarter sales beat forecasts by £70m.
- •UK sales rose 2.8 per cent in the second quarter, while international purchases increased by almost 37 per cent.
- •Next lifted its planned share buyback total for the year to £524m, around £14m more than previously expected.
- •If Next’s share price rises above £135, the company said it will return the remaining £169m through a special cash dividend instead of further buybacks.
Next has upgraded its profit targets for the year after beating second-quarter expectations, putting shareholders in line for a larger payout.
The FTSE 100 retail giant raised its pre-tax profit expectations for 2026 to £1.24bn, around £25m above previous estimates. If achieved, that would represent growth of 7.3 per cent from the previous year.
The group also increased its total sales target, including markdowns and investments, to £7.5bn from £7.3bn, underlining how closely the company’s results are being watched for signs of consumer resilience in a sector still sensitive to spending conditions.
The revision followed sales coming in £70m ahead of forecasts. Next said the stronger performance was partly driven by warm weather and the “release of some pent-up demand” in the Middle East and Northern Europe after a weak first quarter.
Total UK sales rose 2.8 per cent in the second quarter, while international purchases increased by almost 37 per cent.
The high street stalwart also said it was able to spend “much more” on profitable marketing than it had expected, a factor that can matter for retailers balancing growth with margin discipline.
Chris Beauchamp, chief market analyst at IG, said: “In an ever-changing world, upgrades to Next’s profit forecast is much-needed certainty.”
He added: “Next continues to be one of the UK stock markets most impressive and consistent performers.”
Next raises investor payout target
Next also increased its target for returning cash to investors, with plans to buy back £524m of its own shares this year, around £14m more than previously expected.
So far this year, the company has spent £355m buying back stock at an average price of £127.69 per share, reducing its overall share count by 2.3 per cent.
That leaves Next with £169m in additional cash that it plans to return to shareholders over the rest of the financial year. The company said it would continue buying back shares only while the share price remains below a strict limit of £135.
If the stock price rises above £135, Next said it will instead return the remaining £169m to investors through a one-off special cash dividend.
Next shares have risen more than 9 per cent year to date to just over £148. The stock recovered somewhat over the past month after consumer sentiment began to improve following the conflict in the Middle East.
