Next is expecting to top £1bn in profits this year after revising its guidance upwards following a strong Q3 trading period.

The clothing retailer revealed that its full price sales in Q3, covering the three months to 30 October, were up by 7.6% against last year. This was 2.6% ahead of its own previous guidance of 5% for the quarter.

Next suggested that the strong Q3 performance was driven by the early arrival of colder weather this year, compared to an unusually warmer September and early October in 2023.

Under Next’s new guidance for the full year, the group is now forecasting £5.02bn in full price sales, up from previous guidance of £4.98bn.

The retailer’s new expectation for full year profit before tax, now at £1.01bn, is up from £995m in the previous guidance, and would represent a 9.5% increase in profits on last year.

Equity analyst at Hargreaves Lansdown, Aarin Chiekrie, commented that Next had “extended its hot streak of positive results”.

“Skyrocketing demand in its online channel remains a running theme, but it was pleasing to see retail sales return to growth in the period too,” Chiekrie added.

“Looking forward, the online channel is likely to remain the main growth driver. It already brings in more than half of the group’s sales, and expansion overseas is still in its infancy.

“Around 90% of overseas business currently comes from Europe and the Middle East, both of which can be serviced quickly and cheaply from the UK. Given the untapped size of these markets, and increased traction in new markets, there’s a big opportunity if Next can execute its expansion plans well.”

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