British clothing retailer Next has raised its annual profit forecast for the third time in five months after reporting stronger-than-expected sales in its second quarter, boosted by warm weather and disruption at cyberattack-hit rival Marks & Spencer.
The retailer, which operates around 460 stores across the UK and Ireland and maintains an online presence in over 70 countries, said on Monday that full-price sales rose 10.5% in the 13 weeks to July 26 compared to the same period last year. The figure comfortably exceeded the company’s own guidance of 6.5%, though slightly behind the 11.4% growth recorded in the first quarter.
Sales outperformed expectations both in the UK and overseas. UK sales, which account for roughly 80% of the company’s revenue, increased 7.8%. Next attributed this growth to favourable weather conditions and “trading disruption at a major competitor,” without directly naming M&S. However, the reporting period coincided with a cyberattack at Marks & Spencer that forced it to suspend online clothing orders—a disruption which analysts say cost the retailer around £300 million in profit.
Industry observers noted that Next, along with Zara and H&M, appeared to benefit from M&S’s operational difficulties during the period.
International sales climbed an even more robust 26.4%, significantly ahead of expectations. Next credited more effective-than-expected digital marketing for the surge in overseas demand.
Despite the strong quarter, Next maintained a cautious outlook for the remainder of the year. While it raised its second-half sales growth forecast from 3.5% to 4.5%, the company warned that weakening job prospects and the delayed economic impact of April’s employment tax increases could drag on consumer spending.
“We believe that this will increasingly dampen consumer spending as the year progresses,” the company said in a statement.
As a result, Next shares remained flat on Monday, although they have gained 29% since the start of 2025.
Zoe Gillespie, wealth manager at RBC Brewin Dolphin, noted: “Next is cautious about the second half of the year, but the company has a good track record of under-promising and over-delivering.”
Next has now lifted its full-year pre-tax profit forecast by £25 million to £1.105 billion, following a record profit of over £1 billion in the previous financial year. Earlier this week, the company also expanded its brand portfolio by acquiring the rights to maternity retailer Seraphine.
