Next raised its annual profit outlook once again on Tuesday as it reported a better-than-expected rise in full-price sales for the festive period — the nine weeks to late December.

Next operates its own webstore and physical stores, sells a raft of third-party labels and also owns, has big stakes in or licenses labels such as Cath Kidston, Reiss, FatFace, Laura Ashley, Victoria’s Secret and more.

Once again, it seems the business is able to buck the wider trend in UK retail and prosper when others a struggling.

It now expects pre-tax profits for the financial year that ends this month to hit £1.01 billion, having earlier predicted £1.005 billion. It made £918 million in the previous year.

So what was so good about the recent festive period? Full-price sales rose 6%, but were flattered by the timing of the clearance sale. When adjusted for this effect, they still rose 5.7%, better than guidance of a 3.5% hike.

The “over-achievement adds £27 million to full-price sales,” Next said, hence the boost to its profit guidance.

The company also issued initial guidance for the year to the end of January 2026 and said full-price sales should rise 3.5%, with pre-tax profit of £1.046 billion, up 3.6%.

Looking back at the recent sales figures, Next said total UK sales growth was 2.5% in the nine weeks and UK sales rose by the same amount in the year to the end of December. Total full-price product sales were up 6.3% in the festive period and 5.8% for the year.

Next UK Online sales rose 3.8% in the festive season and 3.6% for the year with Online Label UK sales up by 9.2% and 7.5% in those two periods, respectively. It meant total UK Online sales were up 6.1% and 5.2%.

Internationally, Online sales rose 31.4% in November and December and just under 24% for the year. At its Retail unit, its physical retail sales fell 2.1% in the festive period and 1.1% for the year.

As for the guidance the company has issued, it believes that UK growth is likely to slow, as employer tax increases, and their potential impact on prices and employment, begin to filter through into the economy.

And growth overseas should moderate from the 24% it achieved this year to 14% in the year ahead. In the current year, overseas sales benefited from an 85% increase in marketing spend, funded by some price increases. 

It doesn’t believe it can profitably increase its overseas marketing spend by the same percentage next year, and expects the growth to be closer to 20%. But that should still be enough to fuel international sales rises.

So Next clearly has plenty of avenues left open to it for growth in the year ahead.