Next ups profit guidance as Q1 sales rise by 11.4%

Next has upped its full-year profit guidance as it welcomed “better than expected” sales in the first quarter, with full price sales up by 11.4% as trade was boosted by the warmer spring weather.

The “overperformance” meant sales were £55m higher than its forecast for the period, with the group previously expecting a rise of 6.5%.

Next said it was likely that some of these sales have been pulled forward from Q2, and in light of this, it will not raise its sales guidance for the next quarter, or the rest of the year, despite the strength of Q1.

However, accounting for the £55m of additional sales in Q1, it is raising its guidance for full-year group profit before tax by £14m to £1.08bn.

In its latest trading update, Next said: “Our performance in both the UK and overseas was better than we had anticipated. Sales in our Retail shops have been much stronger than we expected but, in our experience, shops benefit disproportionately from the favourable weather. So we are expecting our Retail sales to return to being broadly flat for the rest of the year.

“As we mentioned in our March guidance, we are more cautious about sales in the second half because the comparative numbers were much stronger. In addition, we believe that the full effects of this April’s National Insurance increases will begin to filter through to the wider economy in the second half.”

Earlier this year, Next reported that pre-tax profits rose by 10.1% to £1bn for the first time in its history, with the group raising its full-year guidance for the coming year amid further strong trading.

In the year to January 2025, full price sales rose by 5.8% while total group sales were up by 8.2% to £6.3bn, which the group attributed to the acquisitions of Reiss and FatFace that completed towards the end of 2023/24.