Next has upgraded its full-year profit before tax guidance by £20m for the 2025/26 financial year to £1.1bn.

The fashion and homeware retailer stated that this was a result of its full price sales in the first eight weeks of the current financial year beating expectations.

In the year to January 2025, Next saw its full price sales jump by 5.8%, while its group sales increased by 8.2%.

The group’s profit before tax increased by 10.1% to £1.01bn, while its statutory revenue jumped by 11.4% to £6.1bn.

Next’s pre-tax earnings per share reached 845.2 pence, which is a 11.6% increase year-on-year.

Equity analyst at Hargreaves Lansdown, Aarin Chiekrie, said: "Next continues to deliver for investors, with yet another profit upgrade continuing its hot streak. In 2024, online sales remained the driving force behind performance, helping to offset small declines in retail stores which have come under a bit of pressure given the structural decline of the high street.

"Overseas sales continue to grow at an eye-watering pace, up at double-digit rates. Given the untapped size of foreign markets, there’s a big opportunity ahead if Next can execute its expansion plans well."

Alongside the increase to its profit guidance, the retailer has upgraded its sales estimates for the first half of the year from 3.5% to 6.5%, with its full-year price sales set to increase by 5% year-on-year.

However, Next has not upgraded its second half sales, which sit at 3.5%. It stated that in the last financial year, the second half of the year was "much stronger than the first", so comparative numbers get "tougher" as it moves into the second half.

It also expects tax rises in the UK to "weaken the UK employment market and negatively impact consumer confidence" as the year progresses.

Chiekrie concluded: "Positive momentum has spilt into the new financial year, with sales over the first eight weeks coming in well ahead of expectations. That’s given management the confidence to upgrade full-year profit guidance yet again, expecting pre-tax profits to rise around 5.4%.

"There were some notes of caution though. Sales in the second half of last year were strong, making for a tough comparable period ahead. Tax rises in April are also expected to weaken the UK employment market and dampen consumer confidence as the year progresses. Regardless, cash generation is healthy and if overseas expansion continues, there could be a long runway of growth ahead."

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