NEXT Raises Profit Forecast but Warns of Slower Growth Ahead

Fashion retailer Next has increased its annual profit forecast after sales over the Christmas period turned out to be stronger than it had anticipated.

The retailer now expects annual profits of £1.15 billion and this is the fifth profit upgrade they have made in the past year.

Next reported that full-price sales in the nine weeks to 27 December 2025 rose by 10.6% when compared with a year ago. Breaking this down, UK full-price sales over the Christmas period only climbed by 5.9%, whereas Next’s international revenues jumped by 38.3%.

Despite the upbeat news, Next have cautioned that UK sales growth is likely to slow down in 2026/27. It said this is partly due to “pressures on employment” that will, in turn, put pressure on consumer spending. As a result, Next have forecast UK sales growth of just 1.6% for the coming financial year.

Next noted that its 2025 performance will have been boosted by unusually favourable summer weather and the disruptions that Marks & Spencer faced that temporarily diverted shoppers.

While Next had a good Christmas, this does not seem to have been the case for all retailers. Last week, the parent company of Claire’s and The Original Factory Shop announced plans to enter administration, putting 2,500 jobs at risk.

Analysts suggest that Next’s understanding of its customers helps it to continue performing well. Next also benefits from being able to offer customers the ability to “trade up” to higher quality or premium items, capitalising on a trend among better-off shoppers to focus on fewer, high-value items.

These high street stories suggest that rising unemployment, weaker consumer confidence and continuing changes in the way people shop mean that retail businesses will need to remain agile in the year ahead.

See: https://www.bbc.co.uk/news/articles/cre27x179zpo 

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