Next PLC (LSE:NXT) is well positioned to deliver on raised profit guidance despite wider economic concern within the retail sector, Shore Cap analysts said after a trading update from the FTSE 100 retailer.
“Next speaks to a ‘more benign’ UK consumer environment [...] one with significant uncertainties,” a research note from the broker said, following the update for the nine weeks to 30 December this morning.
Next had unveiled at 5.7% uptick in full-price sales for the period, outdoing previous guidance by £38 million.
This prompted a £20 million upgrade to the retailer’s full-year pre-tax profit guidance, which now sits at £905 million.
“Next is very much on top of its participating markets and knows its own business back-to-front,” Shore Cap said.
Chief executive Lord Wolfson’s knowledge and understanding is “always worth noting and so we absorb with particular interest the firm’s comments on outlook”, the analysts said.
Wolfson expects full-price sales growth of 2.5% within Next’s core business to 2025, alongside 6% among its subsidiary firms.
“No doubt, these expectations are well-grounded with scope to be beaten,” Shore Cap added.
“Next is widely regarded as a well-managed business, one that also has a better grasp than most of overall retail dynamics in the UK.
“The further increase in full-year 2024 guidance is welcome and the full-year 2025 outlook broadly reassuring [...] that should at least support its equity rating.”
Shares climbed 4.9% to 8,478p.