NEXT (LON:NXT) Posts Earnings Results

NEXT (LON:NXT) posted its quarterly earnings results on Thursday. The company reported GBX 364.30 earnings per share for the quarter, Digital Look Earnings reports. NEXT had a return on equity of 58.63% and a net margin of 12.89%.

Here are the key takeaways from NEXT’s conference call:

• First-half performance exceeded expectations: group sales rose 9%, full-price sales increased 7.7%, and profit before tax grew 10.5%, while EPS benefited from early-year share buybacks. The interim dividend will rise 12.6% to 98p.
• International sales were particularly strong, with full-price sales up 24% and total sales up 26%, led by Europe and rapid growth in NEXT-owned brands. Management raised its full-year international sales-growth expectation to 20.5%, although it cautioned that prior Zalando-related growth will create a tougher comparison.
• NEXT lowered its U.K. second-half sales expectations amid anticipated pressure from fuel, wage and other inflation on consumers, forecasting full-year U.K. sales growth of 6.7% overall. Retail remains the main weak spot, with first-half like-for-like sales down 3.3%, and management acknowledged that its full-year retail outlook may be optimistic.
• The company completed £355 million of share buybacks in the first half and expects approximately £500 million of distributable cash for the full year, leaving scope for further buybacks, a special dividend or other capital returns. Management plans to increase leverage modestly while retaining about £300 million of liquidity headroom.
• Management highlighted ongoing productivity investments in warehouses, stores and technology, including agentic AI that could eventually improve development productivity by 30% by February 2028. However, warehouse automation still has service-level glitches at peak volumes, and the AI benefits remain longer-term targets requiring additional investment.

NEXT Stock Performance

Shares of LON:NXT opened at £142.10 on Friday. NEXT has a 52 week low of £116.15 and a 52 week high of £161.75. The stock has a market capitalization of £16.22 billion, a P/E ratio of 19.06, a PEG ratio of 5.66 and a beta of 1.04. The firm has a fifty day simple moving average of £151.12 and a two-hundred day simple moving average of £139.62. The company has a quick ratio of 1.07, a current ratio of 1.55 and a debt-to-equity ratio of 129.98.

Insider Activity

In related news, insider Jeni Mundy purchased 160 shares of the company’s stock in a transaction that occurred on Tuesday, August 11th. The stock was bought at an average price of £155.45 per share, for a total transaction of £24,872. Also, insider Jonathan Blanchard sold 18,012 shares of NEXT stock in a transaction dated Thursday, June 25th. The stock was sold at an average price of £148.02, for a total value of £2,666,136.24. 1.47% of the stock is currently owned by corporate insiders.

Analyst Upgrades and Downgrades

Several research analysts have commented on NXT shares. Deutsche Bank Aktiengesellschaft reissued a “hold” rating and set a £140 price objective on shares of NEXT in a report on Thursday, August 6th. Peel Hunt reiterated a “hold” rating and issued a £139 target price on shares of NEXT in a research report on Wednesday, August 5th. Citigroup increased their price target on NEXT from £132 to £155 and gave the company a “neutral” rating in a research note on Thursday, August 6th. Berenberg Bank restated a “buy” rating and set a £187 price target on shares of NEXT in a report on Friday. Finally, JPMorgan Chase & Co. lifted their price objective on NEXT from £130.30 to £140.40 and gave the stock a “neutral” rating in a research note on Thursday, August 6th. Three investment analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Hold” and an average target price of £153.55.

About NEXT

Founded as a tailoring business in Leeds in 1864 by Joseph Hepworth and Son, today, the company offers clothing, footwear, accessories, beauty and home products to our UK and International customers.

NEXT has over 500 stores in the United Kingdom and Eire, and over 180 franchise branches across Europe, Asia and the Middle East. The company’s main divisions are NEXT Online, NEXT Retail and NEXT Finance. We also launched Total Platform, an online, distribution, tech and logistics solution, in 2020.