Next lifts full year profit outlook by 15 million pounds

Next brand full price sales during the first six months increased by 4.4 percent and total group sales were up 8 percent to 2.9 billion pounds, while the company’s profit before tax of 452 million pounds, was up 7.1 percent.

Full price sales over the first six weeks of the second half rose by 6.9 percent and Next now anticipates second half growth of 3.7 percent versus the previous guidance of 2.5 percent.

The company said in a release that full year growth is expected to be 4 percent, with group sales up 6.6 percent and pre-tax profit by 15 million pounds to 995 million pounds, up 8.4 percent versus last year.

Review of Next plc’s first half results

The company’s UK business only grew by 1 percent, while the Next brand was down 0.9 percent in the UK. Despite the adverse weather comparatives, the company’s Label business grew by 5.5 percent and the wholly-owned brands and licensing business were up 7.7 percent.

The overseas business saw an increase of 23 percent in the first half driven by a healthy performance on the company-owned direct to consumer sites, up 15 percent, and 43 percent growth through third-party aggregation sites. Next overseas online business this year is expected to generate 883 million pounds of sales including markdown, 14 percent of the group’s total sales, and over 120 million pounds in profit.

The company added that acquisitions and total platform are expected to add 34 million pounds to profit this year, mainly as a result of the acquisition of FatFace and an additional stake in Reiss last year.

Next seeks overseas local partners to drive growth

In the year ahead, the company plans to develop the aggregation business in two main ways, by beginning trading with two new partners in Europe and selling non-Next wholly-owned brands and some licensed products through aggregation partners.

The company also aims to build significant long term overseas relationships in markets where the Next brand has little or no recognition. In India, the company has signed a comprehensive franchise and licence agreement with the local operator Myntra, who will develop the Next brand online and in retail stores.

In the USA, Next continues to trade with childrenswear and some of its licensed childrenswear brands within Nordstrom. The company anticipates adding other product categories and wholly-owned brands to Nordstrom in 2025, while launching a trial with another major US retailer in October this year.

The company further said that it also plans to explore new markets such as Japan, China, Australia, South America and Central America, where it is actively seeking partners to develop Next portfolio brands.