REG - Next PLC - Trading Statement

NextAnnouncement

Thu 07:01

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250508:nRSH7734Ha&default-theme=true

RNS Number : 7734H  Next PLC  08 May 2025

Trading Statement for Quarter 1

26 January to 26 April 2025

HEADLINES
 ·   The first quarter has been better than expected.  In the thirteen weeks to 26
     April, NEXT full price sales(1) were up +11.4% versus last year.  This was
     +£55m ahead of our forecast for the period, which was to be up +6.5%.
 ·   We believe much of the over-performance in the first quarter has been the
     result of warmer weather, which has benefited the sale of summer-weight
     clothing.  It is likely that some of these sales have been pulled forward
     from Q2.  So, despite the strength of Q1, we are not increasing our sales
     guidance for Q2, or the rest of the year.
 ·   Accounting for the £55m of additional sales in Q1, we are increasing our
     guidance for NEXT Group profit(2) before tax for the full year by +£14m to
     £1,080m.

(1) NEXT full price sales include items sold in Retail and Online plus NEXT
Finance interest income, but excludes Sale events, Clearance, Total Platform
commission and the sales from subsidiaries.

(2) NEXT Group profit before tax excludes: (1) the cost of brand amortisation,
(2) the profit attributable to shares that we do not own in subsidiary
companies.  In the prior year an exceptional, non-cash, loss relating to the
closure of our defined benefit pension scheme was also excluded.  No
exceptional items are anticipated in the current year.

FULL PRICE SALES PERFORMANCE BY BUSINESS DIVISION

Our performance in both the UK and overseas was better than we had
anticipated.  Sales in our Retail shops have been much stronger than we
expected but, in our experience, shops benefit disproportionately from the
favourable weather.  So we are expecting our Retail sales to return to being
broadly flat for the rest of the year.

 Full price sales by division versus last year  13 weeks to 26 April

                                                versus last year
 Online NEXT UK                                 +4.2%
 Online LABEL UK                                +15.7%
 Total Online UK                                +8.9%
 Retail                                         +5.2%
 Total UK                                       +7.3%
 Online International                           +29.6%
 Total Product full price sales                 +12.1%
 NEXT Finance interest income                   +1.0%
 Total full price sales                         +11.4%

 

GUIDANCE FOR SALES, PROFIT AND EARNINGS PER SHARE (EPS)

Our revised guidance for the full year is summarised below, along with our
previous guidance which is shown in grey.

                                                         New guidance                       Previous guidance
 Guidance for the full year 2025/26 (52 weeks)           Full year (e)  % Versus 2024/25    Full year (e)  % Versus 2024/25
 NEXT full price sales                                   £5.4bn         +6.0%               £5.3bn         +5.0%
 Total Group sales(3) (inc. markdown & investments)      £6.6bn         +5.0%               £6.6bn         +4.4%
 NEXT Group profit before tax                            £1,080m        +6.8%               £1,066m        +5.4%
 Pre-tax EPS                                             929.6p         +10.0%              919.6p         +8.8%
 Post-tax EPS                                            698.1p         +9.7%               690.7p         +8.5%

(3) Total Group sales are the sum of total sales (full price and markdown)
from all of the Group's divisions plus revenue from subsidiaries and
investments.  Group sales are not statutory revenue.

Sales guidance for Q2 and the second half

Our sales guidance for the rest of the year is summarised below.  We have
increased our full year guidance by the overachievement in full price sales to
date.  We have not revised our expectations for the rest of the year, because
we think some of the overachievement in Q1 will have pulled forward sales of
summer-weight products from Q2.

As we mentioned in our March guidance, we are more cautious about sales in the
second half because the comparative numbers (in Autumn Winter 2024) were much
stronger.  In addition, we believe that the full effects of this April's
National Insurance increases will begin to filter through to the wider economy
in the second half.  For completeness, we have shown the two year growth
(versus 2023/24) in the right hand column in grey.

 Full price sales guidance (52 weeks)  % Versus      % Versus

                                       2024/25       2023/24
 Q1 (actual)                           +11.4%        +17.7%
 Q2 (e)                                +6.5%         +10.0%
 First half (e)                        +8.8%         +13.6%
 Second half (e)                       +3.5%         +10.9%
 Full year (e)                         +6.0%         +12.2%

Assumptions on EPS and share buybacks

Please note, our guidance for EPS assumes that we make no further acquisitions
and buy back £316m of shares during this financial year.  This is in line
with the guidance given in our Year End Results in March.  To date, we have
purchased £81m of shares.  However, the NEXT share price is currently above
our buyback limit.

Share buybacks are subject to us achieving a minimum 8% Equivalent Rate of
Return (ERR) on the purchase.  As a reminder, ERR is calculated by dividing
anticipated NEXT Group pre-tax profits by the current market
capitalisation(4).  Our latest guidance of pre-tax profits of £1,080m
results in a buyback limit of circa £116 per share.

(4.) Market capitalisation is calculated based on expected average shares in
circulation for the year, and excludes shares in the NEXT Employee Share
Option Trust.

In the event that we buy back no further shares this year, our post-tax EPS
growth for the year would reduce from +9.7% to +9.0%.  In the absence of any
acquisitions, any surplus cash we were unable to spend on share buybacks would
be returned to shareholders by way of a special dividend early next year
(2026).

A 53-week year

As a reminder, this year is a 53-week year, and profit from the additional
week is excluded from this sales and profit guidance.  We expect week 53 to
add a further c.£20m of profit.  At our Year End Results, we will report
week 53 as a distinct item, so it does not distort any comparisons.

NEXT TRADING STATEMENT
Our next sales update will cover the first 26 weeks of the year to 26 July 2025 and is scheduled for Thursday 31 July 2025.
 

Forward Looking Statements

Certain statements in this Trading Update are forward looking statements.
These statements may contain the words "anticipate", "believe", "intend",
"aim", "expects", "will", or words of similar meaning. By their nature,
forward looking statements involve risks, uncertainties or assumptions that
could cause actual results or events to differ materially from those expressed
or implied by those statements. As such, undue reliance should not be placed
on forward looking statements. Except as required by applicable law or
regulation, NEXT plc disclaims any obligation or undertaking to update these
statements to reflect events occurring after the date these statements were
published.

 

 

 

 Date:         Embargoed until 07:00 hrs, Thursday 8 May 2025
 Contacts:     Jonathan Blanchard, Chief Financial Officer (analyst calls)

               NEXT PLC                                                     Tel: 0333 777 8888
               Alistair Mackinnon-Musson                                    Email: next@rowbellpr.com

               Rowbell PR                                                   Tel: 020 7717 5239
 Photographs:  https://www.nextplc.co.uk/media/image-gallery/campaign-images
               (https://www.nextplc.co.uk/media/image-gallery/campaign-images)

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTQDLFBEELEBBD