Next boosts full year profit guidance as international online sales surge

UK clothing and homeware retailer Next Group has increased its full year profit before tax guidance by 12 million pounds to 1.26 billion pounds (1.69 billion dollars) following better-than-expected sales growth and operational cost savings.

For the first half ending August 1, 2026, Next reported a 9 percent increase in total Group sales to 3.54 billion pounds. Group profit before tax rose 10.5 percent to 569 million pounds.

International performance drives expansion

International direct-to-consumer online sales served as a primary growth engine, surging 23.9 percent during the first six months. Total international full price sales grew 24 percent to 690 million pounds, boosted by expansion across Europe and the US. Digital marketing expenditure overseas rose 63 percent to 51 million pounds while maintaining profitability thresholds.

In contrast, full price sales in UK retail stores fell 1.7 percent to 895 million pounds. Next Online UK full price sales increased 7.4 percent to 1.21 billion pounds.

Margin and cost efficiencies

Group pre-tax net margin widened by 0.3 percentage points to 16.1 percent. Efficiency improvements at the Elmsall 3 automated online warehouse helped lower operational unit costs.

Wholly-owned brands and licences (WOBL), including Lipsy and Love & Roses, expanded 50 percent across combined full price channels, generating an online net margin of 18.8 percent.

Technology investments and economic outlook

Next is piloting agentic artificial intelligence tools across its software development lifecycle, projecting a 30 percent increase in developer productivity over the next two years. The initiative has reduced projected costs to modernise legacy mainframe code from 50 million pounds to under 10 million pounds.

The retailer lowered its second-half UK full price sales growth forecast from 2.8 epercent to 2 percent due to concerns over inflation, high mortgage rates, and labor market weakness. However, full year international online guidance was raised to 20.5 percent growth. Next expects full year post-tax earnings per share to increase 10.3 percent to 820.8 pence.