Key facts
- Next raised its full-year profit forecast by £12 million to £1.26 billion.
- This is the fourth time Next has raised profit forecasts this year.
- Total sales across the group were up 9% in the six months to July.
- Pre-tax profits for the half-year were up 11% to £566 million.
- Next cited unusually warm weather and cost-cutting efforts for its performance.
- The company is emphasizing human designers over AI for fashion creativity.
Next has raised its profit forecast for the fourth time this year, now expecting £1.26 billion in full-year profits, an increase of £12 million. The FTSE 100 company attributed the improved outlook to an "unexpected" boost in sales, driven by unusually warm weather in the UK and effective marketing strategies. The retailer also noted cost-cutting efforts, particularly in its warehouses, contributed to the performance.
For the six months ending in July, Next reported a 9% increase in total sales and an 11% rise in pre-tax profits to £566 million. This performance exceeded initial expectations and followed a strong sales period last year, when the company first achieved £1 billion in annual profits.
Despite the positive results, Next expressed concerns about the rising cost of living, higher mortgage interest rates, and a weak employment market, suggesting potential tax increases by the government. The company also highlighted its approach to AI, stating that while it is being deployed across the business, human designers remain central to fashion creativity, with an investment in traditional artistic techniques.
Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, commented that Next delivered its first-half results "in style," with sales growth accelerating and surpassing original guidance, particularly online due to the hot weather and marketing efforts.