There’s no stopping Next PLC (LSE:NXT). The high street stalwart has once again outpaced its own guidance, prompting Panmure Liberum to stick with its “Buy” call and hail “another upgrade” after a barnstorming third quarter.
For the 13 weeks to 29 October, full-price sales jumped 10.5% year on year, far ahead of the 4.5% growth management had guided for the second half.
That adds roughly £76m more revenue than expected. It wasn’t just an easy comparison, either; last year’s numbers were already strong, making the outperformance more striking.
Online sales led the charge, up nearly 8%, with particularly brisk growth from Next’s third-party labels, which rose 13%. Store sales were 2% higher, defying predictions of a small decline.
International revenue surged almost 39%, fuelled by better stock availability and a hefty increase in digital marketing spend.
The group’s overseas arm also gained from merging warehouse operations with Zalando’s logistics unit, improving how products move through Europe.
All of this means management has nudged full-year sales growth guidance up again, to 9.7% from 7.5%, and lifted profit expectations by £30m to £1.135bn.
That puts it a touch ahead of market forecasts. A cooler fourth quarter is expected, up 7%, down from the summer’s heatwave-fuelled spree, but even that looks solid.
The spoils will be shared. Next plans to return £500m to shareholders this year, split between buybacks already underway and a £369m special dividend, worth about £3.10 a share.
Panmure’s analysts see the momentum continuing into next year, with steady earnings growth and double-digit total returns on the horizon.
At 14,355p a share, the stock already prices in much of the good news, but for now, Next looks like the rare retailer managing to make “guidance raised” sound almost routine.