UK-based fashion retailer Next PLC (GB:NXT) impressed investors by raising its annual guidance yet again, marking the second upgrade in two months. The company delivered strong first-half results and attributed the improved outlook to robust full-price sales. For H1 FY25, Next’s pre-tax profit increased 7.1% to £452 million, backed by an 8% rise in Group sales to £2.95 billion.
Full-price sales increased by 4.4% in the first half, supported by improved stock availability and solid growth through third-party aggregators. Meanwhile, online sales grew 7% in the period and overseas business witnessed a 22.8% jump. NXT shares were up by about 2% as of writing.
With an extensive store footprint in the UK, Next is often considered a bellwether of the retail sector in the region.
Next Raises Guidance on Solid Full-Price Sales
Next said that its full-price sales in the first six weeks of the second half of Fiscal 2025 increased 6.9% and significantly exceeded its expectations. Consequently, the retailer now projects its full-price sales in the second half to grow by 3.7%, up from the prior growth outlook of 2.5%.
Next now expects its FY25 full-price sales to rise by 4%, with overall Group sales growth projected to come in at 6.6%. The company had previously guided for full-price sales growth of 3.4% and overall Group sales growth of 6%.
Also, the company increased its FY25 pre-tax profit guidance from £980 million to £995 million, with the new estimate reflecting 8.4% year-over-year growth. The profit outlook upgrade is backed by Next’s recent acquisition of FatFace and an additional stake in Reiss.
Overall, the company is upbeat about the road ahead and is looking for partners to develop its brands and expand into new markets, mainly Japan, China, Australia, South America, and Central America.
Is NXT Stock a Buy, Sell, or Hold?
Next stock has a Hold consensus rating on TipRanks based on one Buy and six Hold recommendations. The average NXT stock price target of 9,967.14p implies a possible downside of 5.2%. Shares have risen about 32% year to date.
These ratings were issued before the update and could be revised, given the company’s impressive H1 results and improved outlook.
