Next anticipates reaching a £1bn annual profit, with notable sales growth in Europe and premium fashion.
- The interim financial results report an 8% sales increase and a 7.1% rise in profit before tax, reaching £452m.
- Overseas sales exceeded expectations, contributing over £120m to the annual profit, particularly in Europe.
- The US market showed a 67% sales growth in childrenswear, with plans for further category expansion.
- Next continues to grow its premium segment, increasing its stake in Reiss and launching a new ecommerce platform.
In the latest financial report covering the first half of 2024, Next achieved an 8% increase in sales, reaching £2.9 billion, and a 7.1% increase in pre-tax profits, amounting to £452 million. This performance has led to an upward revision of the full-year profit forecast by £15 million, bringing it close to £1 billion.
Next’s overseas markets have contributed significantly to its profit, with sales surpassing expectations. European sales alone have increased by 38% year on year, totalling £206 million. The US market also experienced substantial growth, with a 67% increase in sales for the childrenswear range sold through Nordstrom, reaching £8 million. CEO Lord Simon Wolfson sees considerable potential in these markets, especially for expanding product categories in the US, though specific plans remain undisclosed.
Despite a modest 1% sales increase in the UK, Wolfson maintains a positive outlook for Next’s domestic performance. He acknowledges growth limitations in the UK but sees potential in expanding licenses, third-party brands, and leveraging the Next Total Platform to support other brands’ ecommerce operations.
The premium fashion segment represents a key focus for Next, with a commitment to catering to aspirational consumers. The investment in premium brand Reiss has increased from 72% to 74%, with a £10 million investment, and preparations are underway to launch a third-party brands ecommerce platform, ‘Seasons’, in time for Christmas. This platform will feature brands such as APC, Ganni, Joseph, Marc Jacobs, Rixo, Varley, and Veja in an introductory trial.
Addressing potential store closures in response to the upheld equal pay ruling, Wolfson clarified that closures would depend on store profitability and were not intended as a threat. Next is mindful of cautious acquisition strategies, illustrated by its strategic investments in Reiss and Rockett St George’s homeware brand.
Next is strategically focusing on international markets and premium segments to drive future growth.
