Next sees annual profits topping £1 billion after autumn sales boost

Fashion and homewares chain Next has said it is on track to make more than £1 billion in annual profit after raising its outlook for the third time in three months.

The high street giant cheered a colder weather boost to sales of its autumn/winter ranges, with full-price sales jumping 7.6% in its third quarter to October 26.

The retailer – led by chief executive Lord Simon Wolfson – put the performance down to the “early arrival of colder weather this year, versus an unusually warm September and early October last year”.

It had been expecting third-quarter sales to increase by 5%.

Next said it is increasing its full-year pre-tax profit guidance by £10 million to £1.01 billion, surpassing the £1 billion milestone and marking a 9.5% rise on profits in 2023-24.

Annual full-price sales are now expected to lift 4.9% to £5.02 billion.

It comes after the group raised its sales and profit expectations in both September and August.

Next is pencilling in more muted sales growth of 3.5% in its festive quarter to the end of January, as it said some trading will have been “pulled forward” into the bumper third quarter for the firm.

The group said last month that it is entering a “new era” thanks to its burgeoning overseas sales and strength in combining online with bricks and mortar shops.

Its latest trading update showed UK online sales rising 7.9% in the third quarter, with 2.9% growth across retail shops.

But overseas online sales soared 20.4% and are up 22% so far in the firm’s financial year.

Shares in Next lifted nearly 2% after the update.

Retail analyst Clive Black, at Shore Capital, said that despite the profits upgrade, Next had “taken a cautious outlook in its guidance”, which he said may be down to uncertainty over the Budget and the outlook for retail.

But he added: “No amount of modesty or caution changes the fact that this is shaping up to be an excellent year for Next.”