Profit before tax reached £515 million, up from £452 million a year earlier
LONDON: British fashion and homeware retailer NEXT plc reported a 13.8% rise in profit before tax for the six months ending July 2025, driven by robust international sales and expanding online operations. However, the company cautioned that economic pressures in the UK could dampen growth in the second half.
Group sales rose 10.3% to £3.25 billion, with full-price sales up 10.9%. Profit before tax reached £515 million, up from £452 million a year earlier. Earnings per share climbed 16.8% to 330.2p.
Chief Executive Lord Wolfson said the company was “in a good place,” citing strong performance across its product categories, international markets, and online platform. “Our enthusiasm is tempered by the knowledge that the first half was boosted by factors unlikely to continue,” he added, referencing favourable weather and competitor disruption.
NEXT maintained its full-year guidance, forecasting a 7.5% increase in full-price sales and £1.105 billion in pre-tax profit, up 9.3% year-on-year.
International Expansion and Platform Innovation
International sales surged 32.7%, with notable growth in the U.S. (+58%) and Europe (+34%). The company attributed this to improved website functionality, expanded delivery services, and increased marketing spend, which rose 57% internationally.
NEXT’s online platform saw continued investment, including the commissioning of a new mechanised warehouse and the transition of its European hub to Zalando’s ZEOS distribution network. These moves are expected to reduce operational costs and improve service levels.
Product Diversification and Brand Strategy
Sales from wholly-owned brands and licences (WOBL) grew 33%, contributing £42 million to growth. Third-party brands, including Nike and Ralph Lauren, accounted for 19% of full-price sales and 26% of growth. The company also launched a premium fashion site, Seasons, featuring luxury brands such as Coach and Marc Jacobs.
UK Employment and Legislative Risks
NEXT highlighted concerns over declining UK employment, citing falling vacancies and rising costs. The company warned that the Employment Rights Bill could inadvertently harm flexible part-time work, potentially impacting retail operations.
Shareholder Returns and Capital Allocation
NEXT plans to return £470 million to shareholders through buybacks, with £284 million allocated for dividends. Capital expenditure is forecast at £179 million, up from £151 million last year, reflecting investments in retail space, technology, and warehousing.
Outlook
Despite macroeconomic challenges, NEXT remains optimistic. “Standing still is not an option,” Wolfson said. “If we don’t pursue these opportunities, competitors will.”