Following today’s release of Next’s figures for the year ending 31 January 2025; Emily Salter, Lead Retail Analyst at GlobalData, a leading data and analytics company, offers her view: “Next has shown significant strength as a business in its FY2024/25, with its total trading sales rising by 5.7% as the retailer’s proposition of a wide range of brands spanning across price positions continued to resonate with consumers in the UK and it invested in its international operations, driving growth. Importantly, the retailer delivered this sales growth alongside a rise in profitability, with its operating profit increasing by 9.4%.
“Despite the challenging macroeconomic environment in the UK, Next’s full price sales in the first eight weeks of its FY2025/26 were ahead of expectations, with outperformances in both the UK and internationally. This has led the retailer to upgrade its guidance for full year full price sales growth already, from 3.5% to 5.0%, while pre-tax profit guidance has been upped by £20m, leading to a positive response among investors with share price rising by over 5% in early trading. The retailer has also boosted its capacity for growth in the future, as its automated warehouse Elmsall 3 opened at the end of 2024, with only half of the building currently being used and the rest available to expand into as the business continues to grow.
“Next’s FY2024/25 online international sales rose by an impressive 27.2%, boosted by a significant investment in marketing aided by the retailer raising its prices. This highlights the opportunities available to the Next, including in countries where the online channel is less mature than the UK and consumers are still switching online and have less established online shopping habits. To support growth in Europe, Next will merge its fulfilment capacities in August so that orders from its European websites and Zalando’s websites come from one hub, managed by Zalando’s ZEOS warehousing and distribution business. This will enable Next to leverage Zalando’s infrastructure, boosting the speed of delivery on its own websites and increasing the product range available to Zalando shoppers. Another area of opportunity for Next is in its beauty and home propositions. Although competition in the UK beauty market is high, this is forecast to be the most resilient sector in the UK in 2025 as consumers invest in their selfcare and wellness. Meanwhile in homewares and furniture, Next is able to capitalise on consumers who are willing to trade up for greater quality and design credentials.”
