‘Opportunities lie overseas,’ says boss as Next beats forecasts

Strong international expansion has helped to drive a 3.9 per cent rise in pre-tax profits at Next, the fashion and homeware retailer.
The FTSE 100 company reported significant growth outside Britain, with full-price sales in its overseas division rising by 23 per cent to £433 million in the first half of the financial year.
An increase in international revenues and a recovery in transactions in the UK lifted total group sales to £2.95 billion in the six months to July, up 8 per cent from the previous year.
“Our overseas sales did much better in the first half than we anticipated, in the UK they did pretty much as expected,”Lord Wolfson of Aspley Guise, the chief executive of Next, said.
In Ireland, where the retailer has a 4.1 per cent market share, Next reported full-price sales of £47 million, a 20 per cent increase from the same period last year. The group’s operations in the Middle East posted full-price sales of £136 million.
“In none of our overseas markets other than Ireland where we’ve been established for a long time, is our market share a constraint to growth,” Wolfson said.
In mainland Europe the brand reported £206 million in full-price sales, a 38 per cent increase from the same period last year. Within the region the brand has performed best in northern Europe because “more people are buying and finding our stuff in those territories”, according to Wolfson.
Next expects that its international online business will report £883 million in sales for the 12 months to January 2025, making up 14 per cent of the group’s total sales. About 90 per cent of Next’s overseas business originates from Europe and the Middle East, and the group can ship goods there from the UK “quickly and inexpensively”.
Wolfson, 56, said the opportunity lies overseas, because “it’s going to be a lot easier to grow a business in mainland Europe than it is in the UK”.
During the six months to July 27 the retailer reported full-price sales of £36 million in the India and Asia-Pacific region. Next is also due to open retail stores and develop an online shop in India next year through a partnership deal with Myntra.
Next defied the trend of downbeat retail sales in the UK after a cold spring and wet summer weather dampened consumer spending. The strong half-year results caused the retailer to upgrade its profit and sales guidance for the second time in two months. Wolfson continues to make a habit of under-promising and over-delivering.
Total group sales for the full financial year are expected to be 6.6 per cent higher than previously forecast. The retailer also raised its pre-tax profit expectations by £15 million to £995 million.
The retailer, whose shares have risen more than 25 per cent since the beginning of the year, has defied the odds despite the cost of living crisis and higher inflation, and raised its profit guidance several times over the past year.
It reported that full-price sales in the first six weeks of the second half of the year had “materially exceeded expectations” as they rose 6.9 per cent.
Next is a multinational retailer with headquarters near Leicester and 458 stores across the UK. Its ecommerce hub, Total Platform, provides services that help third-party retailers sell goods online.
Clive Black, an analyst at Shore Capital, said: “Next regularly updates the market and despite a challenging backdrop in the UK for consumer goods including apparel, it has cleverly set expectations over a sustained period of time that means it at least meets and more often than not exceeds expectations.”
Black added that Next “very much looks like joining the £1 billion club of UK retailers this year”.
Shares in Next closed up 55p, or 0.5 per cent, at £103.90.