17 September 2026
If you are covering Next's latest financial results, please find below a comment from Mamta Valechha, consumer discretionary analyst at Quilter Cheviot:
"Next has continued its strong momentum with a pleasing second quarter earnings report. Due to the fact that it delivered a trading update at the start of August, a mere month ago and which was a beat and raise, and given the recent rise in inflation, investors were expecting a steady guide at this stage.
"Instead, Next has pleasantly surprised the market with a small upgrade to full year profit of 1%, with the upgrade driven by higher full-price sales expectations (now 6.7% from 6.3%) and better-than-expected cost savings, particularly in warehousing.
"Within the upgraded sales guidance, Next is raising its outlook for International (now expected to be up 20.5% from 14%), but on the other hand UK growth has been downgraded slightly to 2% (from 2.8%), with Next pointing to rising inflation, mortgage costs and a weak employment market likely leading to a slow, steady decline in consumer spending, likely getting worse if there are further tax increases in October’s Budget.
"Next has also revised upwards its price limits for share buybacks to £136.5, shares are trading above this threshold so there will be no buyback. In the event Next cannot spend the remaining allocation set aside for share buybacks (£180m), this would be returned to shareholders via a special dividend.
"A key reason why Next is a good consideration for investors, and a thesis which still holds today, was that in a backdrop of a cautious UK consumer, it is better to own more defensive and high-quality plays within UK retail, and Next ticked these boxes given its exposure towards more premium fashion brands, kids wear and less exposure to a lower income consumer. Additionally, given its overseas exposure and, logistics and warehouses services it is offering to third-party brands, provides it with diversified sources of revenue."
