Posting pre-tax profits for the year to end January of £1.011 billion, up +10.1% year-on-year, Next joins the likes of Tesco, owners of B&Q and Screwfix Kingfisher, and M&S – all of whom have broken through the billion pound profit ceiling.

Whilst the fashion retailer is now upgrading its profit guidance, raising its expectations by +5.4% for profit in the current year, CEO Lord Wolfson was quick to downplay its £1billion profit milestone as nothing more than exactly that, a milestone, acknowledging that “profits can go up as well as down.”

“To some it may seem an important milestone, even a cause of celebration. We do not share that view, not least because profits can go down as well as up. In fact, we think it would be a big mistake to view the company differently just because it has passed any milestone.”

Lord Wolfson, CEO, Next

While UK store sales were down -1%, domestic online sales were up +4.6%, bolstered by label diversification as the retailer has added new brands to its ecommerce offering. However Next saw its strongest growth coming from overseas trading, including via marketplaces such as Zalando, with international sales posted by the fashion giant up +27% at £930 million last year.

So where to Next for growth?

Whilst its UK stores sales were down -1% year-on-year, Next is planning ten new store openings in 2025, representing the first time the retailer has increased its physical trading space in five years. “Although we’re expecting negative like-for-likes in the UK, there are still towns where we haven’t got a shop,” Lord Wolfsen added. “We think we can open a shop and even if those shops have mildly negative like-for-likes for the next five years, they’ll still make profit.”

Retail Gazette also reported Next is eyeing plans to launch its own third-party online warehousing logistics service this year, allowing brands that sell on its website to consolidate stock at and ship direct from Next-owned Distribution Centres (DCs).

As well as its strategic growth plans, the fashion retailers is also looking to lessen the burden on margins from labour wage hikes announced in the October Budget, with NICs and NLW increases coming into effect in April. Next intends to pass on a +1% increase in prices to customers to help absorb some of these rising wage costs. In addition, it also expects new warehousing technology, reduced staffing hours in stores and energy bill cuts to help offset the rising cost of labour born out of the Autumn Statement.