Next PLC (LSE:NXT) third-quarter results were characterised as an "extraordinary budget-beating quarter" by analysts as the clothing chain delivered the third consecutive quarter of double-digit full-price sales growth.
Jefferies analysts said the company should "take a bow" after reporting full price growth of 10.5%, well above second-half guidance of 4.5%, which underpinned around a 3% lift to full-year profit guidance.
"Critically," they said, growth was geared to ongoing international strength, where sales were up 39% versus a budget of 19.4%.
"We understand that the pattern of delivery was consistent through Q3 (meaning no drop-off as competitor disruption eased), international delivery was broad-based, and that there is currently no evidence of consumer stress in the UK," the Jefferies team added.
This potentially means that positive exit rates to 25/26 "will set up a more optimistic 26/27 outlook" when next results arrive in January.
For UBS, the quarterly numbers strengthened a "growing conviction" over its medium-term investment thesis.
Consolidation of inventory in Europe under Zlanado's ZEOS fulfilment unit has started to benefit sales, the Swiss bank said, with better stock availability "likely" to be a driver over the coming quarters.
Based on new UBS estimates, Next shares are trading at around 17 times 2027 forecast earnings with "sector-leading" investment metrics, that "all point to further re-rating potential in our view".
The Jefferies analysts said that any debate "between believers in the ongoing valuation-accretive shift in the mix of sales to international and those more concerned by domestic macro headwinds has likely been put to bed for today".