Next’s full-year results for the year ending January 2026 confirm that the UK’s largest fashion retailer enjoyed an outstanding year. Next Group’s profit before tax rose 14.5% to £1,158 million. Full price sales increased by 10.9%, and total Group sales, including subsidiaries, were up 10.8%.
Earnings Per Share (EPS) grew by 17.0%. The company returned £421 million, or £3.60 per share, to shareholders through a B Share Scheme. This represented 3.6% of the Group’s market capitalisation.
Retailer factors in £15m of extra costs as geopolitical risks loom
However, the company warns in its financial statement that it expects the ongoing conflict in the Middle East to impact its business, beyond the 6% of sales from that region. It has accounted for £15 million in additional costs expected from the conflict, based on the assumption that the conflict lasts three months. If these costs persist, prices are likely to rise – but the company says that, for now, that remains a contingency, not a plan.
Looking forward, the company expects to drive growth by expanding its product offering and growing its international business, while keeping a tight grip on cost control. It said: “Improve our product offer, grow overseas, develop our platforms, control costs, make margin, and follow the money. It sounds simple, and it is, but it’s not easy. A good plan is only 10% of the battle, the rest is execution.”
Analysts confident Next can weather headwinds
Commenting on the results, Freetrade analyst Duncan Ferris said that they “confirm what we already knew” in delivering “a 2025/26 ahead of anyone’s expectations.” However, he warns that the next financial year won’t be smooth sailing.
“The business faces slowing international momentum, tough UK comparatives, and softening consumer confidence, all against a backdrop of geopolitical uncertainty that could yet hit shoppers in their wallets,” he said. “The prospect of price rises might give some observers pause.”
However, he believes Next is well-positioned to weather this. “Next has more than earned its stripes as a leader in the UK retail sector. Kicking off its new financial year with a boost to profit guidance feels like a clear show of confidence.”
Financial analysts at Peel Hunt support this view. Their trading guidance for Next says: “We believe Next is better placed than most to navigate any challenges that the Middle Eastern conflict may pose for the sector and the wider consumer space. We reiterate our 13,900 TP and Hold recommendation.”
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