The company raised its guidance for FY27 profit before tax (PBT) to reach £1.22 billion (~$1.65 billion) from the previous estimate of £1.21 billion. The revised forecast represents annual growth of 5.2 percent year-on-year (YoY).
Next plc has raised its FY27 profit forecast following stronger-than-expected first quarter trading, driven by strong online and international sales. Full-price sales rose 6.2 percent year-on-year in the first quarter, beating forecasts, while FY27 PBT guidance rose to £1.22 billion (~$1.65 billion). Despite Middle East-related logistical disruptions and higher transportation and energy costs.
Next maintained its full-year full-price sales growth guidance at 5 per cent and expects full-price sales for FY27 to reach £5.9bn, while total group sales are projected at £7.3bn. After-tax earnings per share are forecast to rise 6.5 per cent to 792.9 pence.
For the second quarter, the retailer expects full-price sales growth of 4 percent, with international sales expected to rise 17 percent before moderating later in the year due to tighter comparisons following last year's transition to ZEOS distribution services.
Online demand drives first quarter growth
Meanwhile, full-price sales rose 6.2 percent year over year in the 13 weeks ending May 2, 2026, beating the company's forecast for 4 percent growth. Sales exceeded expectations by £28 million (~$38.08 million), contributing to an additional £8 million (~$10.88 million) of profits.
The retailer said exceptionally strong trading during the first five weeks of the quarter, when full-price sales rose 11.8 percent, drove the outperformance. However, momentum softened during weeks six to eight, when the Middle East conflict disrupted delivery services and regional logistics operations.
“Trade has started to recover in the Middle East as delivery services returned to normal,” the company said in its trading statement.
Total full-price sales in the UK rose 4.4 percent in the first quarter, well above the company's internal forecast of 1.3 percent growth. Online channels remained the main driver of growth: online sales of the Next brand in the UK increased by 5.8 percent and sales of LABEL increased by 15.7 percent. Retail store sales declined 3.4 percent.
International online sales grew 12.8 percent during the quarter despite temporary disruption in Middle Eastern markets.
Next also outlined the financial impact of the Middle East conflict, estimating additional annual costs of £47 million, largely related to freight, distribution, fuel and power costs.
The company said these costs would be fully offset by overseas price increases, operational savings, monetary gains in Europe and improved factory margins.
Price increases outside Europe will vary by market but will not exceed 8 per cent in any territory, while no further price increases are planned in the UK beyond the previously forecast 0.6 per cent increase.
Fiber2Fashion News Desk (SG)
