UK fashion retailer Next plc has raised its full-year profit guidance after reporting stronger-than-expected first-quarter (Q1) trading for fiscal 2027 (FY27), supported by robust online demand and resilient international sales despite disruption linked to the conflict in the Middle East.
The company increased its guidance for FY27 with profit before tax (PBT) to reach £1.22 billion (~$1.65 billion) from the earlier estimate of £1.21 billion. The revised forecast represents annual growth of 5.2 per cent year-over-year (YoY).
Next maintained its full-year full-price sales growth guidance at 5 per cent and expects FY27 full-price sales to reach £5.9 billion, while total group sales are projected at £7.3 billion. Post-tax earnings per share are forecast to rise 6.5 per cent to 792.9 pence.
For Q2, the retailer expects full-price sales growth of 4 per cent, with international sales projected to increase 17 per cent before moderating later in the year due to tougher comparisons following last year’s transition to ZEOS distribution services.
Online demand drives Q1 growth
Meanwhile, full-price sales rose 6.2 per cent YoY in the 13 weeks ended May 2, 2026, surpassing the company’s forecast of 4 per cent growth. Sales exceeded expectations by £28 million (~$38.08 million), contributing an additional £8 million (~$10.88 million) in profit.
The retailer said exceptionally strong trading during the first five weeks of the quarter, when full-price sales surged 11.8 per cent, drove the outperformance. However, momentum softened during weeks six to eight as the Middle East conflict disrupted regional delivery services and logistics operations.
“Trade began to recover in the Middle East as delivery services returned to normal,” the company said in its trading statement.
Total UK full-price sales increased 4.4 per cent in Q1, significantly ahead of the company’s internal forecast of 1.3 per cent growth. Online channels remained the main growth driver, with UK online Next brand sales rising 5.8 per cent and LABEL sales jumping 15.7 per cent. Retail store sales declined 3.4 per cent.
International online sales grew 12.8 per cent during the quarter despite temporary disruption in Middle Eastern markets.
Next also outlined the financial impact of the Middle East conflict, estimating additional annual costs of £47 million, largely linked to freight, distribution, fuel and energy expenses.
The company said these costs would be fully offset through overseas price increases, operational savings, currency gains in Europe and improved factory gate margins.
Price increases outside Europe will vary by market but will not exceed 8 per cent in any territory, while no further UK price increases are planned beyond the previously forecast 0.6 per cent rise.
Fibre2Fashion News Desk (SG)
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