Shares in Next PLC (LSE:NXT) rose 3.2% to 14,020p on Tuesday after the retailer’s post-Christmas trading update came in ahead of expectations, capping what analysts described as a very strong finish to the year.
The upgrade followed better-than-expected sales growth in the nine weeks to late December, prompting management to lift full-year profit guidance.
Next now expects profit before tax of £1.15 billion for the year to January 2026, about 1% higher than previously forecast and up 13.7% on last year.
Deutsche Bank said the sales beat was driven almost entirely by international online trading, which rose 38.3%, far ahead of guidance. UK sales were also stronger than expected, up 5.9%, helped by resilient online demand and modest growth in stores.
The bank noted that while initial guidance for the year ahead looks conservative on sales growth, margins appear better than feared.
Next forecast profit of £1.2 billion for the year to January 2027, slightly below consensus but implying continued cash generation.
Deutsche reiterated its 'hold' recommendation, with a target price of 14,000p.