Highlights

  • Berenberg has issued a BUY rating on NEXT with a price target of GBP 178.
  • NEXT reported +10.5% growth in full-price sales in Q3, exceeding its guidance.
  • The company raised full-year profit before tax guidance by GBP 30 million to GBP 1.135 billion.

Berenberg has issued a BUY rating on NEXT plc (LSE:NXT) with a price target of GBP 178, following the company’s  trading statement for the third quarter ended 25 October 2025. The UK-based retailer reported higher-than-expected sales growth across both domestic and international markets, prompting an upgrade in its full-year profit outlook.

Q3 Sales Outperform Guidance

NEXT’s full-price sales rose +10.5% year-on-year during the 13 weeks to 25 October, surpassing its earlier guidance of +4.5% and outperforming expectations by GBP 76 million. The performance was driven by steady consumer demand across channels and product categories.

In the UK, full-price sales were up +5.4% compared to last year—slightly moderating from +7.6% in the first half but still ahead of the company’s earlier guidance of +1.9%.

Overseas operations saw a significant acceleration, with sales rising +38.8% year-on-year, well above both first-half growth of +28.1% and guidance of +19.4%.

Upgraded Guidance for Q4 and Full Year

Given the stronger-than-expected third-quarter results, NEXT upgraded its fourth-quarter full-price sales guidance from +4.5% to +7.0%, adding an estimated GBP 36 million to projected Q4 sales.

This upward revision led the company to raise its full-year profit before tax forecast by GBP 30 million, bringing the total to GBP 1.135 billion.

Group sales guidance also increased by GBP 150 million, reflecting both improved full-price sales and higher contributions from markdown and clearance activities. The company noted that the timing of its mid-season sale in September allowed surplus stock to be sold earlier in the financial year.

Capital Allocation and Shareholder Returns

NEXT anticipates generating approximately GBP 425 million in surplus cash during the current financial year. Combined with its planned net debt increase, this gives the company around GBP 500 million available for shareholder distributions.

To date, GBP 131 million has been returned to shareholders through share buybacks. However, no further buybacks are expected for the remainder of the year, as the current share price exceeds the company’s buyback threshold of GBP 121 per share.

Based on updated forecasts, NEXT expects to have GBP 369 million in remaining surplus cash at year-end. In the absence of additional acquisitions or buybacks, the company plans to return this capital via a special dividend of approximately GBP 3.10 per share in January 2026.