NEXT (LON:NXT) Releases Earnings Results

NEXT (LON:NXT) posted its earnings results on Thursday. The company reported GBX 760.10 EPS for the quarter, Digital Look Earnings reports. NEXT had a return on equity of 35.14% and a net margin of 12.28%.

Here are the key takeaways from NEXT’s conference call:

• Management held guidance at 4.5% full‑price sales for next year but warned of material downside risk from the Middle East conflict, estimating a near‑term cost of ~£15m (three months) partially offset by ~£8–9m of savings and flagging potential wider cost‑of‑goods inflation and possible 1–2% price pass‑through if disruption persists.
• Strong FY results: group sales +10.8%, profit +13.9% and EPS +17%, with ordinary dividend +15%, a £3.60 B‑share capital return and buybacks resumed — management portrays earnings as high quality despite some one‑off items.
• Major warehousing programme to enable online growth: near‑term capex raised to ~£237m and a phased Elmswell 3 expansion (total ~£307m) through 2027–29; management says the roll‑out should be broadly P&L‑neutral initially and provide 3–5 years of capacity.
• International and owned‑brand momentum — international full‑price sales +35%, Total Platform/partner profits up and wholly‑owned brands/licenses ~+50% growth; company plans ~25% higher international marketing while targeting strong incremental profit returns.
• Retail margins squeezed and new‑store payback relaxed: retail profit down ~5% mainly from wage/NIC increases (c.1.4% margin hit), and 12 of 15 new stores missed sales targets so Next has lowered payback hurdles to reopen expansion options.

NEXT Stock Performance

Shares of NXT stock opened at £123.60 on Friday. The stock’s 50-day moving average is £130.07 and its two-hundred day moving average is £132.37. The company has a debt-to-equity ratio of 117.05, a quick ratio of 1.07 and a current ratio of 1.74. NEXT has a 1 year low of £105.90 and a 1 year high of £146.40. The firm has a market cap of £14.30 billion, a price-to-earnings ratio of 18.74, a PEG ratio of 5.66 and a beta of 1.13.

Wall Street Analysts Forecast Growth

NXT has been the subject of a number of recent analyst reports. Shore Capital Group reaffirmed a “buy” rating on shares of NEXT in a report on Thursday. UBS Group reiterated a “buy” rating and issued a £152 price objective on shares of NEXT in a report on Wednesday. Jefferies Financial Group reissued a “hold” rating and set a £140 target price on shares of NEXT in a research report on Wednesday, January 7th. Finally, JPMorgan Chase & Co. restated a “neutral” rating on shares of NEXT in a research note on Wednesday, January 7th. Three research analysts have rated the stock with a Buy rating and four have given a Hold rating to the company’s stock. According to MarketBeat, the company has an average rating of “Hold” and an average target price of £141.97.

Trending Headlines about NEXT

Here are the key news stories impacting NEXT this week:

• Positive Sentiment: Quarterly results: NEXT reported quarterly EPS of GBX 760.10 and showed a strong return on equity (35.14%) and a healthy net margin (12.28%), numbers that support earnings quality and likely helped sentiment today. Quarterly results
• Positive Sentiment: Broker support: UBS and Shore Capital both reaffirmed “buy” ratings this week; UBS specifically keeps a £152 price target, which provides an upward valuation anchor for investors. Broker ratings
• Neutral Sentiment: Analyst/street note: Recent coverage (Yahoo/finance piece) frames NEXT as “repricing its story” around finer assumptions and risks — useful context for investors but mixed in directional implication. Repricing story
• Negative Sentiment: Technical and liquidity signals: today’s volume (≈3.06M shares) is below the stock’s average volume (≈6.66M), and the share price remains under the 50‑day (£130.34) and 200‑day (£132.41) moving averages—factors that could limit momentum if selling resumes.
• Negative Sentiment: Leverage: NEXT’s debt-to-equity ratio (~117%) is elevated for a retailer and raises sensitivity to interest rates and margin pressure, which could weigh on sentiment if macro headwinds intensify.

NEXT Company Profile

Founded as a tailoring business in Leeds in 1864 by Joseph Hepworth and Son, today, the company offers clothing, footwear, accessories, beauty and home products to our UK and International customers.

NEXT has over 500 stores in the United Kingdom and Eire, and over 180 franchise branches across Europe, Asia and the Middle East. The company’s main divisions are NEXT Online, NEXT Retail and NEXT Finance. We also launched Total Platform, an online, distribution, tech and logistics solution, in 2020.