Next (LSE:NXT), the UK clothing and homeware retailer, said full price sales rose 9.2% in the second quarter, well ahead of its own forecast of 4.0% growth.
Sales came in £70m above forecast, split between £19m in the UK and £51m overseas.
Next attributed the overperformance to warm UK weather matching last year's exceptional summer, pent-up demand released in the Middle East and Northern Europe after a weaker first quarter, and higher spending on marketing than planned.
The retailer raised full-year pre-tax profit guidance by £25m to £1,243m, up 7.3% on last year.
Of that increase, £15m reflects the additional full price sales, while £10m comes from a stronger-than-expected performance in its equity investments.
Next maintained its guidance for full price sales growth of 5.0% for the rest of the year.
It expects UK sales to grow 2.8% in the second half, in line with second-quarter performance, while international sales growth is expected to moderate to 14% as comparatives toughen following last year's switch to ZEOS distribution services in its European aggregator business.
Next also lifted its share buyback guidance to £524m for the year, £14m higher than previously guided, having already purchased £355m of shares at an average price of £127.69, cutting shares in issue by 2.3%.
The company will announce its first-half results on Thursday 17 September.
News Intelligence what this means for the company
Next beat Q2 full-price sales forecasts by £70m (9.2% growth vs. 4.0% guided), driven by warm weather, pent-up Middle East and Northern Europe demand, and higher marketing spend. The company raised full-year pre-tax profit guidance by £25m to £1,243m—£15m from the sales beat itself, £10m from stronger equity investment returns—while maintaining its 5.0% full-year sales growth forecast and increasing share buybacks by £14m to £524m.
The beat is real but heavily dependent on one-off tailwinds (weather, regional demand release, equity gains). Next's own guidance for the second half—2.8% UK growth, 14% international growth—implies the exceptional Q2 momentum does not persist; the company is signalling a return to trend. The £25m guidance lift is material against the £1,243m profit base (2%), but investors should note that £10m (40% of the raise) comes from equity holdings, not core retail operations.
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