Next shares boosted by “marvellously” bullish trading update

Next PLC's (LSE:NEXT) shares rose more than 8%, closing Thursday’s trading at 9,830p thanks to an overall strong second-quarter trading update, which triggered an upgrade to profit guidance.

The retailer’s profit target for its 2025 financial year is now pitched at £980 million, with Next anticipating both higher sales and lower costs.

It said full-price sales were up 3.2% in its second quarter, and the half-year rate was 4.4%, driven by notably strong online overseas sales (which were up nearly 20%).

Whilst overall online sales grew by 8.1%, retail sales declined some 4.7% with the company noting ‘tough weather conditions’ which kept footfall down in the quarter.

“We are maintaining our guidance for full price sales in the second half to be up +2.5% versus last year.  This might seem cautious when compared with the performance in the first half, which was up +4.4%,” the company said in a statement.

Retail sector analysts at stockbroker Shore Capital were notably bullish, in reaction to the update.

“Next's Q2 trading statement carries a little bit more weight than perhaps is normally the case as it is a direct commentary on the UK apparel trade through what has been a quite challenging market, especially in spring against tough comparatives,” analyst Clive Black said in a note.

“So, to beat its own expectation for sales by 3.5%, to deliver positive sales YoY and so raise its FY25 PBT guidance by £20m, is a very pleasant surprise to us and a marvellous achievement.”