Next reported a ‘better than expected’ first quarter (Q1) as it posted a +11.4% rise in full price sales for the thirteen weeks to 26 April. The retailer said Q1 sales were +£55million ahead of forecasts for the period, prompting it to raise its full year profit guidance by +£14million to £1,080million.

The Q1 results follow Next posting pre-tax profits for last year (year to end January) of £1.011 billion, up +10.1% year-on-year, making it the fourth UK retailer alongside Tesco, Kingfisher and M&S to have broken through the billion pound profit ceiling.

Warmer weather lifts Q1 revenues

Attributing warmer weather for the uplift in revenues, Next said a milder spring helped drive demand for summer-weight clothing in Q1, as well as boosting sales performance across physical stores, which it said were “much stronger than expected.” Next’s store sales in Q1 rose +5.2% compared to the same period in 2024.

However the retailer was quick to caveat that its physical retail stores usually benefit disproportionately from favourable weather, and it expects store sales to return to being “broadly flat” for the remainder of the year.

Next also said that, despite the strength of its Q1 results across the group, it wouldn’t increase sales guidance for Q2, as it felt the warmer Spring may have pulled some sales forward from the second quarter.

Next remains cautious as full effect of NIC rises yet to filter through

Next also said it wasn’t increasing sales guidance for the rest of the year, remaining cautious about sales projections for the second half (H2) of the year, pointing to the strong comparative results achieved in H2 in 2024.

It also expects the full effects of April’s National Insurance Contribution (NIC) rises to “begin to filter through to the wider economy” in H2.

Next had already warned in January that, after the tax rises announced in last year’s Autumn Budget, it expects its wage bill to rise by £70million this year. The fashion retailer is looking mitigate against this, eying a +1% increase in prices to customers to help absorb some of the 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.