NEXT festive sales rise but warns slower growth ahead

It appears to have been a merry Christmas for NEXT, which reported better-than-expected sales over the festive period, spanning the nine weeks to 27 December 2025.

The fashion, home and beauty retailer said full-price sales increased by 10.6% year-on-year, exceeding its previous fourth-quarter guidance of 7%.

Growth in the UK slowed but not as much as expected, with sales up 5.9%. This was supported by higher stock levels than last year, when supplier deliveries were delayed by disruption in Bangladesh and global freight networks.

Meanwhile, international online sales rose 38.3%, driven by increased profitable marketing expenditure and higher sales through its main European aggregator, Zalando.

The amount of stock in its end-of-season Sale was higher than previously anticipated and up 5% on last year, but offset by better-than-expected clearance rates.

This outperformance, along with additional sales forecast for January, has led NEXT to increase its full-year profit before tax guidance by £15 million to £1.15 billion.

The company also reported a 10.7% increase in full-price sales for the 48 weeks to 27 December, with UK sales up 6.6%. Full-year results for the year ending 31 January 2026 are scheduled to be announced on 26 March 2026.

However, NEXT expects growth next year to be lower than in the current financial year.

In the UK, current-year growth benefited from favourable summer weather, competitor disruption and improved stock availability, resulting in challenging comparatives. The company also noted that ongoing pressure on UK employment may affect consumer demand as the year progresses.

Growth from overseas direct websites is also expected to moderate following strong performance this year.

Initial guidance for the year ending January 2027 forecasts full-price sales growth of 4.5%, with group profit before tax expected to reach £1.202 billion, also up 4.5%.

NEXT has remained one of the retail sector’s standout performers in recent years, delivering resilient trading despite persistent cost-of-living pressures and rising operating costs.

The latest trading update follows analysts’ expectations of another strong year for the retailer, having recently upgraded its guidance once again, forecasting stronger-than-expected sales over the crucial festive period.

The update comes as reports suggest NEXT is considering a cut-price move for fashion brand LK Bennett, which is understood to be preparing to appoint administrators. The retailer is said to be among several potential bidders assessing a deal focused on LK Bennett’s brand and intellectual property, rather than its small remaining store estate.