Next (NXT) has lifted its full-year profit forecast for the fourth time in 2026, crediting an “unexpected” boost from unusually warm summer weather across the UK.
The FTSE 100 retailer raised its expectations for full-year profits by £12m, bringing the total target to £1.26bn, building on a string of upward revisions throughout the year.
The company last increased its guidance in early August, as Europe contended with a series of heatwaves that pushed consumers to refresh their seasonal wardrobes.
Next, which operates more than 500 UK stores, reported total group sales up 9% in the six months to July, with pre-tax profits for the half-year rising 11% to £566m.
The retailer owns the UK rights to US brands Gap and Victoria’s Secret, as well as stakes in labels including Reiss and Joules, giving it broad exposure across the fashion market.
In a stock market update, Next said: “The first half was much better than we originally anticipated, both in the UK and overseas.”
The company added: “It is important to acknowledge that part of this overperformance has been the result of two unusually warm summers in the UK.”
Next described the performance as “all the more unexpected given the strength of sales last year,” having posted £1bn in annual profits for the first time in its previous financial year.
The group also flagged cost-cutting efforts, particularly across its warehouse operations, as a further contributor to the stronger-than-expected financial performance.
Despite the positive results, Next issued a cautious outlook on the broader economic environment, pointing to pressures on household finances and the labour market.
“Our primary concerns are rising inflation, higher mortgage interest costs and a weak employment market. These worries will only be compounded if they are accompanied by tax increases,” the company said.
The retailer appeared to reference John Healey’s budget on 28 October, stating: “It seems likely that it [the government] will have to increase taxes in order to fund its expenditure.”
On the subject of artificial intelligence, Next confirmed it is deploying AI across the business, including within its tech division, but stressed that fashion design remains firmly human-led.
“In a world where AI is able to do more and more, our experience suggests that consumers prefer the authentic creativity of human beings,” the company said.
Next added that it is “putting more emphasis on designers using techniques that connect them directly to the artwork – painting, drawing, screen printing, etc,” describing it as a significant investment in both time and creative talent.
Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, said: “Next delivered its first-half results in style, with sales growth accelerating over the period and breezing past the fashion company’s original guidance.”
Chiekrie noted that “hotter-than-expected weather and more effective marketing saw customers logging in to refresh their summer wardrobes online, helping offset a small decline in-store.”
Shares in Next rose 2% in early trading on Thursday, making the retailer the top riser across the FTSE 100 index.