8 May 2025
If you are covering Next’s latest financial results, please find below a comment from Mamta Valechha, consumer discretionary analyst at Quilter Cheviot:
“Next produced a much better than expected trading update, with full price sales growing 11.4%, comfortably ahead of the what the group and the market had been forecasting. Much of this outperformance has been due to warmer weather, which benefitted the sales of summer clothing, and it is therefore likely to have been some pull forward of sales from Q2, so this will need to be watched closely going forward. But growth has been seen across all channels, with standouts being Online International where sales grew 29.6%. This will be one of Next’s key drivers of growth over the next few years, as this channel if far from mature.
“Thanks to this strong performance in the first part of the year, Next has once again increased guidance for its full year sales, from 5% growth to 6%. That said, Next does remain cautious going into the second half as April’s national insurance rise for businesses starts to filter through the economy.
“For investors, Next is proving to be a high quality and defensive company, which given the backdrop of a cautious UK consumer will be beneficial going forward. It has been performing strongly of late, however, we think the changing profile of the business, giving Next diversified growth avenues, negligible tariff exposure and consistent performance can provide support to this valuation.”
