Next PLC Surpasses Q3 Sales Guidance and Raises Full-Year Profit Forecast

Q3 sales beat: Next storms past guidance and lifts profit outlook

Next has delivered another tidy upgrade. In the 13 weeks to 25 October, full price sales rose by 10.5% year on year – a clear beat versus guidance of 4.5% and worth an extra £76 million of sales. Management has responded by nudging up fourth-quarter sales guidance and adding £30 million to full-year profit before tax, which now stands at £1,135 million.

Full price sales include Retail and Online product at full ticket price plus Next Finance interest income. They exclude Sale events, Clearance, Total Platform commission and sales from subsidiaries.

What drove the beat: UK resilience and overseas acceleration

UK: growth moderated, but stayed ahead of plan

UK sales increased by 5.4% in Q3. That is slower than the standout first half (+7.6%) – management flagged that H1 benefited from good weather and competitor disruption – but still better than the +1.9% pencilled in. Improved stock availability helped, after last year’s delays from Bangladesh and global freight constraints.

Stores were up 2.0%, while UK Online was the engine room. The core Next Brand online grew 4.2%, and the third-party LABEL business stepped on by 13.0%.

International Online: marketing returns unlocked

Overseas was the star, with International Online up 38.8% in Q3, ahead of the already-strong first half (+28.1%). Next spent more on digital marketing than planned – up 50% versus its earlier guidance of +25% – because the returns were attractive. That flexible, return-on-investment mindset is working.

Europe also benefited from a practical tweak: consolidating stock for direct websites and Zalando into one warehouse and stock pool (run by Zalando’s ZEOS). Better availability on the Zalando marketplace has lifted sales.

Q3 by the numbers: where growth landed

Division (Q3 vs last year)	Growth
UK – Online Next Brand	+4.2%
UK – Online LABEL	+13.0%
UK – ONLINE TOTAL	+7.8%
Retail stores	+2.0%
TOTAL UK	+5.4%
TOTAL ONLINE INTERNATIONAL	+38.8%
TOTAL PRODUCT FULL PRICE SALES	+11.2%
NEXT Finance interest income	-0.1%
TOTAL FULL PRICE SALES	+10.5%

Q4 upgraded: guidance lifted to +7% full price sales

Next now expects Q4 full price sales to grow by 7.0% (from 4.5% previously), adding a further £36 million to the top line. Under the bonnet, management expects UK growth to cool to 4.1%, while International Online moderates to 24.3% as the business annualises last year’s very strong Q4 step-up.

Q4 full price guidance vs last year	Q4 (e)
UK (Online + Retail Stores)	+4.1%
International Online	+24.3%
TOTAL PRODUCT SALES	+7.4%
NEXT Finance interest income	-0.1%
TOTAL FULL PRICE SALES	+7.0%

Note: management also references a two-year lens – Q4 two-year growth of about 65% for International versus 67% in Q3 – to underline that the deceleration is a comp effect rather than trading deterioration.

Full-year outlook raised: sales, profit and EPS

The upgrade flows through to revenue and earnings. Guidance for total Group sales increases by £150 million, helped by markdown timing and a little more Clearance. Profit before tax rises to £1,135 million, with post-tax EPS guided at 729.4p. EPS assumes no further share buybacks this year.

Guidance for FY2025/26 (52 weeks)	New guidance	Previous
NEXT full price sales	£5,552m (+9.7%)	£5,440m (+7.5%)
Total Group sales (inc. markdown & investments)	£6,870m (+8.7%)	£6,720m (+6.3%)
NEXT Group profit before tax	£1,135m (+12.2%)	£1,105m (+9.3%)
Post-tax EPS	729.4p (+14.6%)	714.1p (+12.2%)

Group sales include full price and markdown across all divisions plus revenue from subsidiaries and investments. They are not statutory revenue. Profit guidance excludes brand amortisation and minority interests.

Cash returns: buybacks paused, special dividend signposted

Next expects to generate around £425 million of surplus cash this year. Together with a planned increase in net debt (to keep net debt to PBIT at 0.63, in line with last year), that provides roughly £500 million available for distribution.

• £131 million has already been returned via buybacks. No further buybacks are assumed because the share price is above the buyback limit of £121 per share. Buybacks require at least an 8% Equivalent Rate of Return (pre-tax profit divided by market cap).
• On current guidance, remaining surplus cash is £369 million.
• In the absence of acquisitions or more buybacks, the plan is a special dividend of around £3.10 per share at the end of January 2026.
• The interim dividend of 87p per share will be paid on 5 January 2026.

This is a 53-week year. The extra week is excluded from sales and profit guidance but is expected to add about £20 million of profit and is included in cash forecasts. It will be reported separately at year end.

Why it matters: operational execution and disciplined growth

There is a lot to like here. The business is showing broad-based momentum, with UK Online and International both pulling their weight. Management is leaning into marketing only when the returns justify it, and the consolidation of European stock for Zalando is a simple operational change that is paying off. The upgraded sales guidance and higher PBT underline that this isn’t just volume growth – it is profitable growth.

There are still watch-outs. Q4 will lap a very strong overseas performance, so the deceleration to 24.3% is sensible, but it makes Christmas trading pivotal. Finance interest income is flat to slightly negative (-0.1%), so the uplift is coming from product trading rather than credit. The EPS guide assumes no further buybacks; if the share price stays above the £121 buyback limit, returns to shareholders default to dividends rather than accretive buybacks.

Key takeaways for investors

• Beat and raise: Q3 full price sales +10.5% against 4.5% guided; FY PBT lifted to £1,135m.
• International engine: +38.8% in Q3, fueled by higher-ROI marketing and better Zalando availability.
• UK steady: +5.4% with online outperforming stores; improved stock availability helped.
• Cash returns visible: interim 87p in January; intention for a c.£3.10 special dividend at end-January 2026 if no buybacks or acquisitions.
• Next catalyst: Christmas trading update on Tuesday 6 January 2026.

Overall tone: positive. Next is executing well, comping tough periods without leaning on heavy discounting, and guiding confidently into peak season. The special dividend marker and the clarity on buyback discipline add to the investment case.