British fashion retailer Next plc has retained its full-year profit forecast after third-quarter trading exceeded expectations, with strong international online sales helping compensate for slower growth in the UK market.
For the 13 weeks ended 31 October 2026, total full-price sales increased 8.1% year on year, beating the company’s guidance by £33 million. Product sales at full price advanced 8.5%, while income from Next Finance interest rose 1.2%.
Although overseas growth benefited from improved marketing returns, additional operating expenses arising from new European Union tariff requirements offset part of the contribution to profit. The retailer therefore maintained its existing full-year financial projections.
International online business drives growth
UK full-price sales increased 2% during the quarter, matching expectations but slowing from the first-half pace. Unusually warm weather in September affected seasonal demand, while store sales remained under pressure.
UK online sales grew 4.4%. Within this segment, sales from the Next brand rose 2.2%, wholly owned brands and licences increased 18.9%, and third-party brands recorded 4% growth. Physical retail store sales declined 1.7%.
International online trading delivered stronger results, with sales climbing 32.2%, significantly above the company’s 20.5% forecast. Direct international sales increased 32.7%, while sales through third-party online platforms grew 31.3%.
Next also reported improved returns from overseas marketing campaigns. This enabled it to increase international marketing expenditure by 67% year on year, compared with its earlier planned rise of 42%. The performance highlights the growing importance of international digital channels in the retailer’s expansion strategy.
Nine-month sales maintain positive momentum
For the 26 weeks ended 1 August 2026, total full-price sales had increased 7.7%. UK sales rose 3.6%, supported by 7.4% growth in online trading, while store sales declined 1.7%. International online sales advanced 23.9%.
Across the 39 weeks ended 31 October, total full-price sales grew 7.9% year on year. Product sales increased 8.3%, UK sales advanced 3%, and international online revenue rose 26.8%. Next Finance interest income recorded a 1% increase over the same period.
EU tariffs create additional cost pressures
New EU tariff requirements introduced on 1 July and 1 November affect online orders within the bloc when products are imported from outside the European Union.
Next expects to reduce the impact through operational adjustments and selective price increases. However, after accounting for other savings, the company anticipates an additional net cost of approximately £5 million for the current financial year.
Separately, Next acquired its Enderby head office complex for £44 million, an investment expected to deliver an internal rate of return of 8.5%. Its year-end net debt forecast, excluding lease liabilities, remains at £815 million.
Full-year financial guidance unchanged
Next continues to forecast group profit before tax of £1.255 billion for FY27, representing an 8.4% increase. Full-price sales for the Next business are expected to reach £6.03 billion, up 7.3%, while total group sales, including markdowns and investments, are projected at £7.54 billion, an increase of 7.6%.
Post-tax earnings per share are forecast to rise 10.3% to 820.6p.
For the fourth quarter, the retailer expects full-price sales to grow 5.8%. UK sales are projected to increase 2%, while international online sales are forecast to advance 20.5%, against a more demanding comparative period.
The latest Next FY27 trading performance reflects a business benefiting from overseas digital expansion while managing softer domestic retail conditions and rising cross-border operating costs. Its ability to sustain international growth and protect margins will remain important to achieving its full-year targets.
