Next reports that, in the nine weeks to 27th December, full price sales were up 10.6% YoY, ahead of guidance for the quarter (+7.0%).
UK sales were up +5.9%. Growth in the UK slowed, but not by as much as the retailer expected (previous guidance was +4.1%). "We believe that sales benefited from higher stock levels than last year, when supplier deliveries were delayed by disruption in Bangladesh and global freight networks," says Next, adding that international sales were up 38.3%.
"This over-achievement, along with additional sales forecast in January, adds £51m to full price sales," says Next, "and we are increasing guidance for full-year PBT by £15m to £1,150m [up +13.7% YoY]."
In initial guidance for the year ahead, Next forecasts full-price sales growth to be up 4.5%, and group PBT to be £1,202m, up 4.5%.
It says it expects growth next year to be lower than the current year for four reasons: "In the UK, growth in the current year was boosted by very favourable summer weather, competitor disruption and improved stock levels. So we will face tough UK comparatives, particularly in the first half.
"Continuing pressures on UK employment are likely to filter through into the consumer economy as the year progresses.
"Growth from our overseas direct websites is likely to moderate from the exceptional levels achieved this year. In the current year, direct international sales benefited from 60% increase in profitable marketing expenditure. We think it is unlikely that we will be able to profitably increase our marketing expenditure by as much next year. Within this guidance, we have assumed that overseas marketing will increase by around 25%.
"In 2025, two one-off changes in overseas stock availability served to boost our international sales. These were: a significant increase in the amount of wholly-owned brands and licensed products made available on overseas websites; and combining our direct and aggregator stock holdings in Europe through ZEOS in August resulted in a step change in aggregator sales."
