Next interim profit grows but retailer warns of weaker UK growth

Next PLC on Thursday said it delivered strong first-half growth and lifted its interim dividend, but maintained full-year guidance while cautioning on weakening UK economic conditions.

The Leicester, England-based clothing retailer said pretax profit in the six months to July 26 rose 18% to GBP509.0 million from GBP432.1 million a year earlier.

Revenue increased 9.9% to GBP3.14 billion from GBP2.86 billion. Earnings per share advanced to 324.2 pence from 267.9p.

Shares in Next were down 6.5% at 11,225.00 pence each in London on Thursday morning.

Full-price sales rose 11% year-on-year, with total sales climbing to GBP3.25 billion from GBP2.95 billion. Next Finance generated GBP101 million in profit, up 4.6% on-year, and is expected to deliver GBP185 million in profit for the full year, up 2%.

Next declared an interim dividend of 87p per share, up from 75p a year prior, payable on January 5, 2026.

Looking ahead, the company kept its annual guidance unchanged, with full-year pretax profit expected at GBP1.11 billion, up 9.3% from GBP1.01 billion last year.

Post-tax earnings per share are expected at 714.1p, up 12%. It guided for full-price sales of GBP5.44 billion, up 7.5% on-year, including second-half growth of 4.5%.

However, Next warned that UK sales growth will slow to 1.9% in the second half from 7.6% in the first, citing stronger prior-year comparatives, the boost from competitor disruption earlier in 2025, and a challenging economic backdrop.

"We expect UK employment opportunities to continue to diminish as we enter the second half, with the effects of April's national insurance changes continuing to filter through into the economy as the year progresses. We believe that this will increasingly dampen consumer spending," the company said.

It added that the medium to long-term outlook for the UK economy "does not look favourable," pointing to declining job opportunities, regulation, and rising taxes.

Nonetheless, Next said it remains "in a good place" with growth opportunities across products, its online platform, and international expansion.