Next PLC (LSE:NXT) strong full-year results have drawn plaudits from the City, with two banks lifting their forecasts after the high street stalwart posted pre-tax profits of just over £1bn - a rare bright spot in UK retail.
The fashion and homeware group, long regarded as one of the sector’s best operators, continues to outpace rivals with a blend of online expansion, international growth and disciplined capital returns.
Thursday’s results showed pre-tax profits up 5% to £1.01bn, in line with upgraded January guidance and driven by resilient full-price sales.
Panmure raised its price target to 11,500p and reiterated its ‘buy’ rating, citing better-than-expected online performance in both the UK and overseas. The broker credited a sharper online proposition - bolstered by new third-party and own brands, improved delivery and infrastructure - for helping Next take market share from weaker online players.
International operations are also gaining momentum, thanks to increased marketing and investment in platform technology, Panmure said. Notably, Next has guided for 5% full-price sales growth in the current financial year, a punchier forecast than recent years.
Store openings are back on the agenda, and the broker sees scope for further acquisitions as competitors come under pressure.
Deutsche Bank also raised its price target, from 9,700p to 10,800p, following a 4% upgrade to its earnings forecast.
Analyst Adam Cochrane said the results reinforced Next’s reputation for operational excellence and expectation management. He pointed to the growing diversification of the business, including the Total Platform logistics and tech service for third-party brands — as a way of reducing fashion risk and earnings volatility.
Deutsche maintained its ‘hold’ rating but noted that share buybacks and resilient UK demand were helping earnings push into double-digit growth territory.
With less exposure to the threat of US tariffs than some European peers, Next may look increasingly attractive to investors seeking defensive retail names.
In late morning trading, the stock was flat at 10,975p.