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RNS Number : 1277D  Next PLC  06 May 2026

Trading Statement for Quarter 1

6 May 2026

HEADLINES
 ·   Full price sales(1) in the first quarter were up +6.2% on last year, against
     our forecast for the period of +4.0%.  This was £28m ahead of forecast.
 ·   The overachievement in sales was the result of exceptionally strong growth in
     the first five weeks of the year (+11.8%).
 ·   The additional £28m sales added +£8m of profit, increasing our guidance(2)
     for the full year to £1,218m.  We are maintaining our guidance for full
     price sales for the rest of the year.
 ·   We plan to mitigate the ongoing cost increases caused by the conflict in the
     Middle East with a combination of moderate price increases in some
     international territories and operational cost savings.  See below for
     detail.

(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.

Note, last year's financial year included a 53rd week, so sales comparisons
are given against the corresponding 'offset' weeks last year; i.e. we are
comparing weeks 1-13 of this year with weeks 2-14 of last year.

(2) Guidance for NEXT Group profit before tax excludes: (1) the cost of brand
amortisation and (2) the profit attributable to shares that we do not own in
subsidiary companies.  In the prior year an exceptional property profit of
£16m and £24m of profit from a 53rd week were also excluded.  No
exceptional items are anticipated in the current year.

FULL PRICE SALES PERFORMANCE BY BUSINESS DIVISION

Growth in the first quarter, by division, is set out below.  Further analysis
is given on the following page.

 Full price sales by division versus last year  13 weeks to 2 May

                                                versus last year
 UK - Online NEXT Brand                         +5.8%
 UK - Online LABEL                              +15.7%
 UK - ONLINE TOTAL                              +10.1%
 Retail Stores                                  - 3.4%
 TOTAL UK                                       +4.4%
 TOTAL ONLINE INTERNATIONAL                     +12.8%
 TOTAL PRODUCT FULL PRICE SALES                 +6.5%
 NEXT Finance interest income                   +0.9%
 TOTAL FULL PRICE SALES                         +6.2%

 

First quarter growth in more detail

Trade in the first quarter can be viewed as three distinct periods:

Weeks 1-5:   Before the conflict in the Middle East; and before last year's
UK sales strengthened as a result of unusually warm weather.

Weeks 6-8:  The conflict in the Middle East began, with considerable
disruption to service in the region.

Weeks 9-13:  Trade began to recover in the Middle East as delivery services
returned to normal.

 Full price sales versus last year  Weeks   Weeks     Weeks    Total

                                    1 - 5    6 - 8    9 - 13   Q1
 Total UK                           +8.6%   +3.3%     +1.7%    +4.4%
 International                      +26.0%  - 8.9%    +18.3%   +12.8%
 TOTAL PRODUCT FULL PRICE SALES     +12.7%  - 0.3%    +5.5%    +6.5%
 NEXT Finance interest income       +0.1%   +1.4%     +1.5%    +0.9%
 TOTAL FULL PRICE SALES             +11.8%  - 0.2%    +5.3%    +6.2%

UK sales

Sales in the UK, up +4.4%, have been better than expected (we had planned for
Q1 UK sales to be up +1.3%).  As anticipated, growth has weakened as we move
into a period when last year's sales began to strengthen.  Compared to two
years ago, UK sales growth has remained consistent in all three periods, at
around +13%.

International sales

The graph below shows the impact of the conflict in the Middle East on our
international sales.  Over the last few weeks we have seen significant
recovery, albeit growth was not as strong as in the first five weeks of the
year.  Weeks 9 to 13 need to be viewed as a whole, as the performance of
individual weeks are distorted by the timing of Easter.

International Full Price Sales Growth by Week

Full Price Sales guidance for Q2 and the second half

We are maintaining our guidance for sales for the rest of the year, as set out
below.

 Full price sales by division versus last year  Q1         Q2      H2      Full year

                                                (Actual)   (e)     (e)     (e)
 UK (Retail Stores + Online)                    +4.4%      +1.0%   +2.9%   +2.8%
 International                                  +12.8%     +17.0%  +14.0%  +14.4%
 NEXT Finance interest income                   +0.9%      +0.2%   - 0.6%   0.0%
 TOTAL FULL PRICE SALES                         +6.2%      +4.0%   +5.0%   +5.0%

In the UK, we expect sales in Q2 to be up +1.0% on last year.  As a reminder,
Q2 last year benefited from exceptionally warm weather and competitor
disruption.

Our forecast for International sales in Q2 is to be up +17.0%, broadly in line
with weeks 9-13 of Q1.  Growth in the second half is expected to moderate to
+14.0%.  This is because in August last year we achieved a one-off step
change in our aggregator sales when we switched to ZEOS distribution services,
materially increasing stock availability in our European aggregator
business.  So our comparative numbers become tougher from August onwards.

FULL YEAR GUIDANCE
FINANCIAL IMPACT OF THE CONFLICT IN THE MIDDLE EAST

The table below sets out the forecast costs associated with the conflict in
the Middle East along with planned mitigation.  The guidance we gave in March
estimated the cost of the conflict to be £15m, however that only covered the
first three months of the war.  We have now updated our guidance accounting
for ongoing disruption for the remainder of the year based on two assumptions:

 ·   Fuel costs remain at or around their current levels.
 ·   Disruption in factories and global transport networks neither worsen or
     improve.

We have made these assumptions not because they are necessarily right, but
because they explain the impact on profit assuming nothing changes.  In the
event things change we will adjust prices accordingly.

International costs

Cost increases in our international business mainly relate to the increased
costs of air freight and local distribution networks.  These costs will be
offset by price increases overseas which will be implemented in May.  Price
increases outside Europe will vary by country, but will be no more than +8% in
any territory.  In Europe, cost increases have been offset by currency gains,
so there is no need for price increases.

UK costs

Cost increases relate to the increased costs of transporting goods from
suppliers to the UK, distribution within the UK, and energy costs.  These
costs will be offset by cost savings and margin gains.  These were achieved
through better than anticipated factory gate prices (normally such gains would
be passed on to customers through lower prices).  Based on our current
estimates, we do not anticipate increasing our UK prices over and above the
0.6% we had forecast at the beginning of the year.

 Middle East impact and mitigations (£m)              Previous forecast  Additional costs & savings      New full year forecast
 Cost increases in the International business
 Outbound delivery to the Middle East                 (5)                (12)                            (17)
 Outbound delivery to other overseas countries        (2)                (5)                             (7)
 Inbound bulk freight costs to the UK                 (1)                (2)                             (3)
                                                      (8)                (19)                            (27)
 Cost increases in the UK business
 Inbound bulk freight costs to the UK                 (3)                (8)                             (11)
 Fuel and energy cost increases within UK operations  (4)                (5)                             (9)
 Total cost increases                                 (15)               (32)                            (47)
 Cost savings and margin gains
 Price increases in the Middle East                   1                  12                              13
 Currency gains in Europe                             -                  5                               5
 Price increases in other overseas countries          -                  1                               1
 Margin gains from better factory gate prices         2                  10                              12
 Other cost savings                                   12                 4                               16
 Total cost savings and margin gains                  15                 32                              47

 Net impact                                           0                  0                               0

REVISED FULL YEAR GUIDANCE

Our revised guidance for the full year is summarised below, along with our
previous guidance which is shown in grey.  The guidance for sales, costs and
profit is based on the assumption that the situation in the Middle East does
not materially deteriorate or improve.

                                                         New guidance                       Previous guidance
 Guidance for the full year 2026/27                      Full year (e)  % Versus 2025/26    Full year (e)  % Versus 2025/26
 NEXT full price sales                                   £5.9bn         +5.0%               £5.9bn         +4.5%
 Total Group sales(3) (inc. markdown & investments)      £7.3bn         +4.6%               £7.3bn         +4.2%
 NEXT Group profit before tax                            £1,218m        +5.2%               £1,210m        +4.5%
 Post-tax EPS                                            792.9p         +6.5%               787.3p         +5.8%

(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.

EPS AND SHARE BUYBACKS

Our guidance for EPS assumes that we complete £510m of share buybacks this
year.  So far this year, we have purchased £196m of shares at an average
share price of £126.52, reducing the number of shares by 1.3%.

Share buybacks are subject to us achieving a minimum 8% equivalent rate of
return (ERR) on the purchase.  ERR is calculated by dividing (1) anticipated
NEXT Group pre-tax profits by (2) the current market capitalisation(4).
Based on our latest guidance, our share price limit for buybacks is
£132.

In the event we cannot spend all of the £510m on share buybacks, remaining
cash would be returned to shareholders via a special dividend or capital
return.

(4) Market capitalisation is calculated based on shares in circulation, so
excludes shares in the NEXT ESOT.

NEXT TRADING STATEMENT
Our next sales update will cover the first 26 weeks of the year to 1 August 2026 and is scheduled for Wednesday 5 August 2026.

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, Wednesday 6 May 2026
 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
               (https://www.nextplc.co.uk/media/image-gallery)

 

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