International Sales Boost Q3 Performance for Next

Next plc has published a third quarter trading update covering the 13 weeks ending 31 October 2026.

HEADLINES

• In the thirteen weeks to 31 October, full price sales were up +8.1% versus last year. This was +£33m ahead of our guidance of +5.8% for the second half. 
  
  
• All of the sales over-performance came from our international business. The additional £5m profit from these sales has been offset by increased international operational costs.
  
  
• We are maintaining our guidance for full year profit before tax at £1,255m, up +8.4%. 

FULL PRICE SALES PERFORMANCE BY BUSINESS DIVISION 

Our full price sales performance versus last year, by business division, is set out below for the third quarter and the year to date.   

COMMENTARY ON SALES PERFORMANCE IN Q3

UK
As expected, growth in the UK has slowed compared to the first half of the year, with full price sales up +2.0% versus last year, in line with our guidance.  However, growth has been volatile, with unseasonably warm weather adversely affecting sales in September.   

International
International sales were up +32.2%, against our forecast of +20.5%.  Direct sales were up +32.7%, sales through third-party aggregators were up +31.3%.  The overperformance on NEXT Direct was driven by the fact that our marketing was more profitable than expected, and this enabled us to increase the amount spent on marketing by +67% versus last year, compared with our guidance of +42%. 

Q4 FULL PRICE SALES GUIDANCE

We are maintaining our Q4 full price sales guidance to be up +5.8% versus last year, as summarised below.   

We expect full price sales in the UK to be up +2.0%, in line with our performance in Q3.  International growth is expected to moderate as we trade against stronger aggregator growth in Q4 last year.   Growth in NEXT Finance interest income is expected to increase in Q4, to +3.0%, due to the increase in APR on ‘pay-in-3’ credit accounts. 

FULL YEAR GUIDANCE FOR SALES, PROFIT AND EARNINGS PER SHARE

Our full year guidance is summarised below, along with our previous guidance shown in grey.  Profit guidance is unchanged.  Earnings Per Share (EPS) guidance reflects our latest forecasts for surplus cash and share buybacks (see below).

International operational cost increases - new EU tariff regime 
The EU has introduced new tariffs this year, effective from 1 July 2026 and 1 November 2026.  These tariffs impose additional costs on online orders that are placed in the EU, when the stock used to fulfil the order is imported from outside the EU.  Although we have a large stockholding within the EU (with our partner ZEOS), some of our orders are fulfilled from our UK stockholding and so incur these charges. Over time we expect to fully mitigate these new tariff costs through adapting our operations and selective modest EU price increases.  This year, as we adapt to the tariff change, we expect a net cost increase of around £5m after accounting for other cost savings.    

SURPLUS CASH AND SHAREHOLDER DISTRIBUTIONS

Surplus cash
The combination of surplus cash and our planned increase in net debt would have generated £535m 4 of funds for distribution to shareholders.  However, we recently purchased our Head Office complex in Enderby for £44m, an investment which we estimate delivers an IRR of 8.5%.  So, this year, we now anticipate generating a total of £491m for distribution to shareholders.

Our guidance for net debt (excluding lease debt) at the year end is unchanged, at £815m. 

Share buybacks
To date, we have returned £355m to shareholders through share buybacks, leaving £136m to invest in acquisitions or to distribute to shareholders.

Our guidance assumes that we use the £136m to buy back shares.  This may not be possible because the share price is currently above our buyback price limit of £136.50 per share.  As a reminder, NEXT share buybacks are subject to achieving a minimum 8% Equivalent Rate of Return (ERR) on the purchase.  ERR is calculated by dividing anticipated NEXT Group pre-tax profits by the current market capitalisation . 

In the event we do not make any acquisitions or buy back shares, we will distribute surplus cash through a special dividend or capital distribution.  

CHRISTMAS TRADING STATEMENT

On Wednesday 6 January 2027 we are scheduled to give an update on sales to Saturday 26 December 2026.  

Insight DIY Perspective

1) International growth is increasingly important to Next's future – but the UK remains a more challenging market. International online sales surged by 32.2% in Q3, significantly ahead of expectations, while UK growth slowed to 2.0%. This highlights the potential of international ecommerce to drive future expansion, but also raises an interesting question about how much longer the UK can remain a relatively modest contributor to growth. For UK retailers, Next's performance is a reminder that investment in digital infrastructure, international reach and customer acquisition can open up opportunities beyond domestic markets.

2) Growth is impressive, but managing the cost of expansion will be the real test. Despite beating its sales expectations by £33m, Next has maintained its full-year profit-before-tax guidance at £1.255bn, with the additional £5m profit from international sales offset by higher operational costs. New EU tariffs are also creating additional pressure, although the company expects to mitigate these over time. The wider lesson for retailers is that international expansion brings opportunities, but success depends on converting additional sales into sustainable profit. Next's ability to achieve that while maintaining momentum will be an important indicator of its longer-term growth potential.

1) Full price sales include items sold in Retail Stores and Online, including third-party brands, plus NEXT Finance interest income, but excludes Sale events, Clearance, Total Platform commission and the sales from subsidiaries.   Note, last year’s financial year included a 53rd week, so product sales comparisons are given against the corresponding ‘offset’ weeks last year; i.e. for Q3 we are comparing weeks 27-39 of this year with weeks 28-40 of last year.   

2) NEXT Group profit before tax excludes: (1) the cost of brand amortisation and (2) the profit attributable to shares that we do not own in subsidiary companies.  Last year's profit excludes profit from the 53rd week.  Group profit excludes exceptional profits achieved last year or anticipated for this year.

3) Total Group sales are the sum of total sales (full price and markdown) from all of the Group’s divisions plus revenue from subsidiaries and investments.  Revenue from subsidiaries and investments is based on our share ownership, e.g. we own 74% of Reiss so we report 74% of their sales.  Group sales are not statutory revenue. 

4) Surplus cash is defined as cash generated after deducting interest, tax, capital expenditure, funding customer receivables, investments or acquisitions, and ordinary dividends.   

5) Market capitalisation is calculated based on the number of shares in circulation, excluding shares in the NEXT Employee Share Option Trust.

Source : Next plc 

Image : Next plc

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