Next shares rise after Christmas shopping frenzy
Next shares jumped on Tuesday after the high street staple toasted another frenzied Christmas shopping period.
The FTSE 100 group’s stock soared as much as 5 per cent to 14,265 pence, with shares now up by almost a fifth over the past six months after it hailed a 10.6 per cent jump in fourth-quarter full prices sales, sailing past market expectations.
“Next had a merry little Christmas buoyed by strong third party and international sales,” Russ Mould, investment director at AJ Bell.
“As usual, Next shows refreshing clarity about what investors can expect in terms of capital returns and this looks generous, which may help to sustain its appeal to investors through any turbulence in 2026.”
Soft UK sales
UK sales growth also beat prior expectations of 4.1 per cent, hitting 5.9 per cent, bolstered by heightened online shopping and higher stock levels.
But retail stores continued to suffer from low footfall, with just 1.4 per cent of sales coming from physical shops.
International sales rocketed a staggering 38.3 per cent, exceeding guidance of 24.3 per cent, with Next crediting the over performance to increased marketing expenditure and the performance of its European partner Zalando.
The boost in shoppers generated £51m in profit, leading the group to hikes its guidance by £15m to £1.15bn, a year on year increase of 13.7 per cent, marking the third profit upgrade in over five months.
Path ahead less clear
But despite the strong Christmas trading period, the retailer warned sales growth would slow due to continuing “pressures on UK employment” which it said were likely to “filter through into the consumer economy as the year progresses”.
UK sales are predicted to increase by only 1.6 per cent in the next financial year, lagging behind overall growth with sales set to rise by 4.8 per cent.
The group credited this decline in expectations to favourable summer weather, competitor disruption and improved stock levels bolstering sales in 2025.
International sales are anticipated to rise 16.5 per cent, with the group deeming it unlikely to increase its marketing expenditure as much in the next financial year.