Shares in high street giant Next leapt in early trading on Tuesday 6 January 2026, following a robust Christmas trading period that saw sales significantly outperform expectations.
Festive Sales Surge and Share Price Rally
The retailer's share price climbed 2.8 per cent to 13,970 pence, extending a six-month gain of 14.8 per cent. This rally was fuelled by a stellar final quarter performance, where full-price sales rose by 10.6 per cent year-on-year, comfortably beating market forecasts of seven per cent.
Market analyst Adam Vettese from eToro noted: "Next has delivered another resilient Christmas performance, underscoring its position as one of the UK high street's strongest operators." He added that while much of this success is already reflected in the share price, it leaves "less room for error if consumer demand softens."
Online and International Sales Drive Growth
UK sales, bolstered by heightened online activity and better stock availability, grew by 5.9 per cent, surpassing the anticipated 4.1 per cent. However, physical stores continued to struggle with low footfall, contributing just 1.4 per cent of total sales.
The standout performance came from overseas, where international sales rocketed by a staggering 38.3 per cent, far exceeding guidance of 24.3 per cent. Next credited this over-performance to increased marketing spend and the strong results from its European partner, Zalando.
Profit Upgrade and Shareholder Returns
The festive shopping boost generated an additional £51m in profit, prompting the FTSE 100 group to raise its full-year profit guidance by £15m to £1.15bn. This marks a year-on-year increase of 13.7 per cent and is the company's third profit upgrade in just over five months.
In a move to return value to shareholders, Next bought back £131m of its own shares and anticipates having approximately £768m available for shareholder distributions in the coming financial year.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, commented: "Next's Christmas trading update gave investors plenty to be jolly about... Unwrapping some of the headline figures, sales growth continues to be driven by its online channel... Within that, overseas sales have continued to grow at an eye-watering pace."
Cautious Outlook for the Year Ahead
Despite the strong finish to 2025, Next expects growth to moderate in the next financial year. It anticipates total product sales to rise by just 4.8 per cent, with UK sales predicted to increase by a mere 1.6 per cent due to ongoing pressures on employment and consumer confidence.
International sales are forecast to grow by 16.5 per cent, a slower pace as the group does not plan to increase marketing expenditure as aggressively, and the benefit of improved stock availability is not expected to repeat.
Nevertheless, analysts remain optimistic about Next's prospects, pointing to its history of "under-promising and over-delivering." Chiekrie added: "With Next's track record... this growth target looks a touch conservative. Next remains one of the brightest sparks in the UK retail scene, and there's potential for more success if it can continue nailing its overseas expansion."
