Next has announced a landmark financial achievement, surpassing £1bn in annual pre-tax profits for the first time in its history. This impressive result represents a 10.1% year-on-year uplift, signaling strong growth. The retailer’s confidence is further evidenced by its raised sales and profit forecast for 2025, with full-year sales projected to increase by 4.3%.
While total sales for the fashion and home retail giant rose by 4.3% for the year ending January 25, the company did experience a 1.2% decline in like-for-like sales. This dip is primarily attributed to the challenging economic conditions in the UK market, which have led to a slowdown in consumer spending. However, Next’s online division has shown remarkable resilience, with UK online sales climbing by 4.6% and online profit increasing by 8%. Additionally, the retailer’s strategic expansion into third-party brand sales has proven highly successful, with these sales rising by 10% during the period, driven by their robust online platform.
Despite this overall growth, Next remains cautious about the near-term economic outlook. The company anticipates that the UK economy will remain challenging, with rising employer taxes following the October Budget expected to reduce consumer spending and impact the broader economy. Consequently, Next forecasts a 2% reduction in like-for-like sales in the coming year. However, they aim to partially offset this decline by opening new stores, which are projected to add approximately 1.7% to sales. This strategy is reflected in their statement, where they budget for retail full-price sales, on a like-for-like basis, to be down 2.0%. The addition of new space is expected to add 1.7% to retail sales, leading to an expected overall decline of only 0.3% in retail full-price sales compared to the previous year. In essence, Next’s financial results reveal a company that is navigating economic headwinds while strategically leveraging its online strength and planning for future growth through store expansion.”
