UK's Next lifts profit outlook as warm weather, M&S disruption boost trade
profit outlook
for the third time in five months as it reported better-than-expected second-quarter sales, benefiting from warm weather and disruption at cyberattack-hit rival Marks & Spencer.
Next has around 460 stores in the UK and Ireland and an online presence in over 70 countries selling the Next brand and more than 700 other brands. With the United Kingdom accounting for around 80% of its sales, it is often considered a useful gauge of how British consumers are faring.
It said on Thursday full-price sales in the 13 weeks to July 26 rose 10.5% versus last year - ahead of guidance of 6.5% and compared to growth of 11.4% in the first quarter.
Sales overperformed against Next's expectations in both the UK and overseas, it said.
The retailer said UK sales growth of 7.8% was largely due to better than expected weather and "trading disruption at a major competitor", which it did not name.
However, Next's second quarter overlapped a period where M&S stopped taking online clothing orders following a cyberattack which has cost it 300 million pounds ($398 million) in profit.
Industry data has shown Next to be a beneficiary of M&S' woes, along with Zara and H&M.
Next said international sales grew a faster than expected 26.4% mainly because its digital marketing proved more effective than anticipated.
Though Next raised its guidance for second half full price sales growth to 4.5% from 3.5% previously, it remained cautious for the period.
It expects UK employment opportunities to continue to diminish, with the effects of April's employer tax increases continuing to filter through into the economy.
"We believe that this will increasingly dampen consumer spending as the year progresses," it said.
Reflecting that caution, Next shares were flat on Thursday, having risen 29% in 2025 so far.
"Next is cautious about the second half of the year, but the company has a good track record of under-promising and over-delivering," Zoe Gillespie, wealth manager at RBC Brewin Dolphin, said.
Next raised its forecast for year to January 2026 pretax profit by 25 million pounds to 1.105 billion pounds. Profit topped 1 billion pounds for the first time in 2024/25.
On Wednesday, Next bought the brand rights to maternity retailer Seraphine.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Fibre2Fashion
35 minutes ago
- Fibre2Fashion
UK manufacturing downturn eases slightly in July, but risks remain
The UK manufacturing sector showed tentative signs of stabilisation at the start of Q3, with the S&P Global UK Manufacturing PMI inching up to 48.0 in July from 47.7 in June—a six-month high. While the index remained below the neutral 50 mark, indicating contraction for the tenth consecutive month, the rate of decline in output was the mildest since the current downturn began. Business optimism improved to a five-month high, driven by expectations of a future recovery, new product launches and internal improvements. Nonetheless, sentiment stayed below the long-run average, weighed down by weak demand, policy uncertainty, and global trade challenges, S&P Global said in a press release. Output shrank for the ninth month in a row, but contraction was notably softer. Consumer and intermediate goods producers returned to growth after prolonged declines, though investment goods output worsened. New orders fell at a quicker pace, extending a ten-month slide, with firms citing low client confidence and tighter budgets—partly influenced by recent government decisions on the National Minimum Wage (NMW) and employer National Insurance Contributions (NICs). UK manufacturing showed tentative stabilisation in July, with the PMI rising to a six-month high of 48.0, though still in contraction for the tenth month. Output declined at the slowest pace in the current downturn, and business optimism improved. However, weak domestic and export demand, rising costs, job cuts, and policy uncertainty continued to weigh heavily on the sector's overall performance. Export orders declined for the 42nd straight month, reflecting global tariff concerns, Brexit-related frictions, and rising foreign competition. Weaker demand was reported from key markets including North America, the EU, India, and China. Employment in the sector continued to shrink, with July marking the ninth consecutive month of job losses. Hiring freezes and layoffs were reportedly used to offset cost pressures stemming from wage and tax reforms. Backlogs fell further despite reduced capacity, indicating under-utilisation of resources. Stocks of finished goods declined for a sixth month, while purchasing activity and input inventories were also cut to align with softer demand. Although cost pressures remained stable overall, firms noted rising transport, shipping, and supplier charges. Despite glimmers of hope, the data underscores a sector still under stress, with subdued domestic and international conditions tempering any immediate recovery. Rob Dobson, director at S&P Global Market Intelligence , said: 'The UK manufacturing sector is starting to send some tentatively encouraging signals, with the downturn moderating in July as factory output came close to stabilising and future output expectations hit the highest since February. However, it's clear that there's no assured path back to strong growth. Clients in the home market often remain unwilling to spend due to cost factors such as higher minimum wages and employer NICs, while export markets are being buffeted by geopolitical stresses and trade and tariff uncertainties. 'The biggest concern remains the labour market, with the rate of job cutting through much of 2025 among the steepest since the pandemic year of 2020. With the Autumn budget only a few months away, manufacturers will likely remain cautious and focussed on stabilisation while waiting to see if future budget announcements provide much needed support or further challenges to overcome." Fibre2Fashion News Desk (KD)
India.com
35 minutes ago
- India.com
Mahindra & Mahindra Buys 59% Stake In SML Isuzu For Rs 555 Crore
Mumbai: Mahindra and Mahindra (M&M) has completed the acquisition of a 58.96 per cent controlling stake in SML Isuzu Limited for Rs 555 crore. Following regulatory approvals, the company will be renamed 'SML Mahindra Limited'. In April 2025, M&M had signed an agreement to buy this stake at Rs 650 per share. The acquisition includes the entire 43.96 per cent stake held by Sumitomo Corporation, the promoter of SML, and a 15 per cent stake held by Isuzu Motors Limited. M&M will also launch a mandatory open offer to acquire up to 26 per cent from eligible public shareholders, as per SEBI Takeover Regulations. The company said the move is a significant step towards building a strong presence in the above 3.5-tonne commercial vehicle (CV) segment, where it currently has a 3 per cent market share. In comparison, it enjoys a 54.2 per cent share in the sub-3.5-tonne light commercial vehicle (LCV) segment. "It is a big step for M&M towards establishing a strong presence in the >3.5T Commercial vehicles (CV) segment, where the company has a 3 per cent market share presently, as compared to a 54.2 per cent market share in the Sub-3.5 tonne LCV segment," the company said. M&M expects this acquisition to double its CV market share to 6 per cent immediately, with plans to grow it further to 10-12 per cent by FY31 and over 20 per cent by FY36. As part of the leadership changes, M&M has appointed Vinod Sahay as Executive Chairman of SML Isuzu from August 3. Dr Venkat Srinivas will take charge as Executive Director and Chief Executive Officer from August 1. Both leaders will continue to hold their existing positions within the Mahindra Group alongside their new responsibilities. SML has a nationwide presence in the trucks and buses segment and holds a 16 per cent market share in the intermediate and light commercial vehicle (ILCV) bus segment. On August 1, shares of Mahindra & Mahindra closed at Rs 3,160.20 on the Bombay Stock Exchange (BSE).
Hans India
an hour ago
- Hans India
The end of registered post: The seal of trust now lives in memories
The chime of the postman's bicycle bell, the anticipation of letters peeking from his bag, and the thrill of signing for a registered post—those moments are etched in the hearts of Indians like an era, which sadly is coming to an end. The Indian Postal Department has decided to discontinue its 50-year-old registered post service from September 1, merging it into Speed Post. This is not merely the end of a service, but the closure of a history tied to the emotions, memories, and the trust of millions. Registered post, once the carrier of appointment letters, legal notices, or loved ones' messages, will now fade into memories. The history of registered post dates to the British era, introduced for the secure delivery of important documents. Known for its reliability and legal validity, documents sent through it were accepted as evidence in courts. According to the Indian Postal Department's 2024-25 report, nearly 98 million registered post items were sent nationwide, reflecting its widespread popularity. The acknowledgment of delivery feature, with the recipient's signature confirming receipt, made it even more trustworthy. In that era, the postman was no less than a messenger, delivering letters of joy, hope, or sorrow to every doorstep. The digital age and the growing influence of private courier services have compelled the postal department to reorganize its operations. The government argues that merging registered post with Speed Post (launched in 1986) will enhance efficiency, improve tracking, and provide faster service. It offers international delivery to over 230 countries, whereas registered post's tracking was limited and primarily effective for domestic deliveries. However, this change will inevitably impact the common person economically. The starting fee for registered post was ₹25.96, with an additional ₹5 per 20 grams. In contrast, Speed Post begins at ₹41 for up to 50 grams, 20-25% more expensive. In rural India, where 89 per cent of the 1.56 lakh post offices (2025, Indian Postal Department) are the primary means of communication, this change could burden small traders, farmers, and ordinary citizens. The emotional impact of this decision is profound. The younger generation, accustomed to digital communication, may see this as routine, but for the older generation, registered post was part of their life's stories; it was a bridge of emotions. This change is a step toward modernising the postal department. Can Speed Post fully replace the trust and affordability of registered post? Will rural India embrace this change seamlessly? Well, only time will tell. The end of registered post is not just the closure of a service; it is the end of an era that was woven into the soul of Indian postal history. Prof R K Jain,Barwani (MP)
