Jefferies has reaffirmed its “buy” recommendation for Next PLC (LSE:NXT) with a price target of £11.80 following the clothing chain's surprise upgrade to its annual profit forecast, driven by a strong performance in the third quarter.
Next reported a 7.6% increase in full-price sales, beating its 5% forecast, due to strong domestic sales and a boost from early colder weather.
The company has raised its full-year profit expectation to £1.005 billion, up from £995 million, reflecting positive momentum across both domestic and international markets.
Jefferies credits Next’s effective business management for maintaining steady growth despite inflation and economic pressures.
The company’s international expansion has been particularly strong, with online sales overseas rising by 20.4% in the third quarter, underscoring the retailer’s adaptability and appeal beyond the UK.
Domestically, Next has also capitalised on recent weather trends to drive retail sales, while online UK sales saw notable growth of 7.9%.
The investment bank highlighted Next’s ability to adjust its quarterly forecast and maintain a steady cash flow despite market challenges, calling it a “well-run group” with strong prospects for further growth.
Jefferies anticipates that Next will likely continue to achieve earnings growth, keeping it well-positioned in the competitive retail landscape.
In afternoon trading, the stock was up 1% at 10,170p.