Next plc Reports Mixed Earnings, Upgrades Sales Estimates

Mixed results from Next plc as profit before tax fell while sales surged. The company upgraded expectations for the first half's sales, buoying investor sentiment around potential growth.

Date: 27-03-2025

AI Rating: 6

**Profit Margins and Earnings**: The report shows statutory profit before tax for Next was 987.0 million pounds, down from 1.02 billion pounds. Earnings per share (EPS) fell to 605.5 pence from 655.9 pence, indicating a decrease in profit margin year-over-year. However, the NEXT Group profit before tax saw a 10.1% increase to 1.01 billion pounds. This contrast between statutory and group results could suggest varying performance across the company's divisions. **Revenue Growth**: Revenue from continuing operations surged to 6.12 billion pounds from 5.49 billion pounds, marking a significant revenue growth. The total Group sales also rose 8.2%, showing a strong performance in various sectors. This growth is a positive indicator for investors as it highlights the company's capability to expand despite the decline in statutory profit. **Future Forecasts**: The company noted that full price sales in the first eight weeks of the current year have exceeded expectations, prompting upgrades in sales estimates from 3.5% to 6.5% for the first half. This proactive revision demonstrates management's confidence in the company's direction, suggesting continuing growth in the upcoming year. The anticipated profit before tax for NEXT Group was revised upwards to 1.07 billion pounds, exceeding prior guidance, which enhances investor outlook. The expected EPS for January 2026 has also been adjusted to 690.7 pence, further indicating strong future performance projections. **Dividends**: The proposed final ordinary dividend of 158 pence reflects the company's intention to reward shareholders, suggesting confidence in its financial position even in the wake of mixed earnings. Such actions typically enhance investor sentiment and could positively impact stock price. In summary, while the decrease in statutory profit and EPS is concerning, the overall revenue growth, increased sales estimates, and shareholder returns could positively affect investor sentiment and stock price moving forward.

Stocks: NXT