Next beat its own sales forecast by £33m in the three months to 31 October, but none of that extra money came from Britain. The clothing retailer said on Thursday 5 November that full price sales rose 8.1%, with overseas online sales up 32.2% and UK sales up just 2.0%. Its shops went backwards again, and a run of warm weather pushed UK sales down in three straight weeks of September.
The headline looks like another upgrade from a company that has made a habit of them, yet this time the profit forecast did not move. Next held its full-year guidance at £1,255m because the £5m of profit on the extra sales was swallowed by higher overseas costs, including new EU tariffs. Later the same day, the Bank of England raised interest rates to 4%, adding to one of the pressures Next had already named as a worry for UK spending.
In short
- Sales beat: full price sales rose 8.1% in the 13 weeks to 31 October, £33m ahead of Next’s 5.8% guidance, and all of the beat came from overseas.
- UK slowdown: UK full price sales rose 2.0%, in line with guidance. Online grew 4.4%, while shops fell 1.7%.
- Profit unchanged: full-year pre-tax profit guidance stays at £1,255m, up 8.4%, as extra overseas costs cancelled the extra £5m of profit.
- Weather swing: UK sales fell in each of the three weeks from 13 September, then rose by between 2.3% and 5.9% in the four weeks from 4 October.
- Shopper angle: the APR on existing pay in 3 accounts is due to rise from 29.9% to 34.9% in the current quarter, and Next’s next sales update is on 6 January 2027.
What did Next report for the third quarter?
Next published its trading statement through the London Stock Exchange at 7am on Thursday. It covers the 13 weeks to 31 October and answers the main question raised in our preview of the Next trading update: whether UK sales would land above or below the 2.0% the company guided in September. They landed exactly on it.
Next’s main measure is full price sales. That figure covers items sold at their ticket price in shops and online, including third-party brands, plus interest from Next Finance. It leaves out Sale events, clearance, Total Platform commission and sales from part-owned subsidiaries such as Reiss, FatFace and Joules.
Because last year had a 53rd week, Next compares this year’s weeks 27 to 39 with weeks 28 to 40 of last year. The table below sets out the performance by division, using the company’s own figures.
| Full price sales against last year | First half (26 weeks to 1 Aug) | Q3 (13 weeks to 31 Oct) | Year to date (39 weeks) |
|---|---|---|---|
| UK online: Next brand | +2.1% | +2.2% | +2.2% |
| UK online: wholly-owned brands and licences | +33.5% | +18.9% | +27.9% |
| UK online: third-party brands | +9.5% | +4.0% | +7.5% |
| UK online total | +7.4% | +4.4% | +6.3% |
| UK shops | -1.7% | -1.7% | -1.7% |
| Total UK | +3.6% | +2.0% | +3.0% |
| Online international | +23.9% | +32.2% | +26.8% |
| Total product sales | +8.1% | +8.5% | +8.3% |
| Next Finance interest income | +0.9% | +1.2% | +1.0% |
| Total full price sales | +7.7% | +8.1% | +7.9% |
Press coverage has settled on the same split. Bloomberg’s headline said overseas sales had offset a UK slowdown, and The Times led on UK shoppers reining in spending ahead of Christmas. Proactive and ADVFN also reported the 8.1% rise and the held profit forecast, while Business Live quoted Next’s “as expected” wording on the UK.
The comparison with a year ago is demanding. Next’s third quarter of 2025 showed full price sales up 10.5%, UK sales up 5.4% and overseas sales up 38.8%, according to Sharecast’s report at the time. This year’s 2.0% UK growth therefore sits on top of an already strong quarter.
Why did Next’s UK sales growth slow?
Next gives one specific reason. “As expected, growth in the UK has slowed compared to the first half of the year,” the statement says, adding that growth “has been volatile, with unseasonably warm weather adversely affecting sales in September”. Some reports have linked the slowdown to pressure on household budgets, but the statement itself does not mention budgets, the Budget or consumer confidence.
How much did the warm September cost?
A chart in the statement shows the swing week by week, and it is the most useful part of the document for anyone trying to read the British clothing market this autumn. UK full price sales rose in the five weeks from 9 August to 6 September. They then fell for three weeks before rebounding as October arrived.
| Week commencing | UK full price sales against last year |
|---|---|
| 2 August | -1.5% |
| 9 August | +2.6% |
| 16 August | +3.2% |
| 23 August | +6.0% |
| 30 August | +4.1% |
| 6 September | +3.8% |
| 13 September | -3.3% |
| 20 September | -5.2% |
| 27 September | -3.0% |
| 4 October | +4.7% |
| 11 October | +5.9% |
| 18 October | +4.2% |
| 25 October | +2.3% |
On a simple average, which ignores the different sizes of each week, the three September weeks come out at about minus 3.8% and the four October weeks at about plus 4.3%. Those averages are our calculation rather than Next’s. They suggest that a good part of the autumn spending was delayed rather than lost.
The pattern fits the wider market. BDO’s High Street Sales Tracker recorded the weakest September in seven years and then online sales up 10.1% in October as colder weather sent shoppers looking for winter clothes. The Office for National Statistics also reported a 2.2% fall in online and other non-store sales volumes in September.
The final week deserves some caution. Growth eased from 5.9% in the week of 11 October to 2.3% in the week of 25 October, which may mean the catch-up was already fading, although Next has not said so. Its forecast for the current quarter is again 2.0%, which assumes no lasting boost from the cold snap.
Why are Next’s shops still falling behind online?
Shops are the weakest part of the UK business. Full price sales fell 1.7% in the third quarter, the same fall as in the first half, even with new stores contributing. In the first half, like-for-like store sales fell 3.3% and new space added 1.6%, according to Next’s half-year report.
In September, Next forecast shop sales down just 0.2% for the second half and acknowledged that the number “might look optimistic”. Online was forecast to grow 3.4%. After one quarter, shops are running well below that second-half figure and online well above it.
The latest statement no longer splits the fourth-quarter forecast between shops and online, and only gives 2.0% for the UK as a whole. By our reckoning, shops would need to return to growth in the Christmas quarter for the second half to reach minus 0.2%. Next has not said whether that earlier figure still stands.
Physical stores still matter a great deal. Shops made up 30% of group full price sales in the first half, against 45% for UK online and 26% for overseas, and Next planned to open eight new stores and re-site two this year. Its half-year report also credits its stores for handling parcel collections and returns.
What is happening to the brands beyond Next?
The most striking change inside UK online is the slowdown in what Next sells beyond its own label. Wholly-owned brands and licences, a group that includes Lipsy, Love & Roses, The Set, Cath Kidston, smALLSAINTS and Laura Ashley, grew 18.9% after 33.5% in the first half. Third-party labels, such as Nike, Adidas, Skechers and ASICS, grew 4.0% after 9.5%.
The Next brand barely changed, with online growth of 2.2% against 2.1%. So the UK online slowdown came almost entirely from the ranges that had driven its growth earlier in the year. Next’s statement does not explain why.
Why did overseas sales surge, and why did profit not follow?
International sales rose 32.2% against Next’s forecast of 20.5%. Sales through its own overseas websites rose 32.7%, and sales through third-party aggregators rose 31.3%. Next says the outperformance on its own sites came about because “our marketing was more profitable than expected”, which allowed it to raise overseas marketing spend by 67% rather than the 42% it had planned.
The scale of the business is now substantial. Next counted 5.7 million overseas customers on its own websites in the 12 months to July, up 29%, against 10.5 million UK online customers, up 7%, according to its half-year report. Overseas accounted for 26% of full price sales in the first half.
The extra £33m of sales produced only about £5m of extra profit, or roughly 15p for every additional pound on our calculation. Next says that profit has been offset by increased international operating costs. As a result, the sales upgrade did not reach the bottom line.
What are the new EU tariffs, and who pays?
Next says the EU “has introduced new tariffs this year, effective from 1 July 2026 and 1 November 2026”. They add cost to online orders placed in the EU when the stock used to fill the order is imported from outside the bloc. Next holds a lot of stock inside the EU with its partner ZEOS, but some orders are still shipped from Britain and incur the charges.
The statement does not name the measures, although the dates match the EU’s €3 duty on low-value parcels (about £2.50 at current rates) and the legal deadline for the EU handling fee on small parcels. Next expects a net cost of about £5m this year after other savings. “Over time we expect to fully mitigate these new tariff costs through adapting our operations and selective modest EU price increases,” it says.
Those price rises are aimed at EU customers, and the statement announces no price change for UK shoppers. The more important point for other British retailers is the mechanism. Any UK business that ships directly to EU consumers now faces the same arithmetic, and many will not have a partner warehouse on the scale available to Next.
What has changed in Next’s full-year guidance?
Next raised its sales forecasts but left profit alone. Full price sales are now expected to reach £6.03bn, up 7.3%, against £6.00bn and 6.7% in September. Group sales guidance moves up to £7.54bn, while earnings per share slip fractionally because of changes to its forecasts for surplus cash and share buybacks.
| Full-year 2026/27 guidance | New forecast | Change on 2025/26 | Previous forecast | Change on 2025/26 |
|---|---|---|---|---|
| Next full price sales | £6.03bn | +7.3% | £6.00bn | +6.7% |
| Total group sales | £7.54bn | +7.6% | £7.49bn | +6.9% |
| Group profit before tax | £1,255m | +8.4% | £1,255m | +8.4% |
| Post-tax earnings per share | 820.6p | +10.3% | 820.8p | +10.3% |
This breaks a run of upgrades. Next lifted its profit forecast to £1,243m in August and to £1,255m in September, and a sales beat has usually meant another rise. Holding the figure suggests that overseas growth is becoming more expensive to deliver.
For the fourth quarter, Next expects total full price sales up 5.8%, made up of 2.0% in the UK and 20.5% overseas. It expects overseas growth to moderate because it will be trading against stronger aggregator sales from a year earlier. Next Finance interest income is forecast to grow 3.0%, helped by the pay in 3 rate change.
What about buybacks and the Enderby head office?
Next has bought its head office complex at Enderby, Leicestershire, for £44m, an investment it estimates will return 8.5% a year. That reduces the money it expects to distribute to shareholders this year from £535m to £491m. It has already spent £355m on buybacks, leaving £136m for acquisitions or further distributions.
Spending that remaining sum on buybacks may not be possible. Next’s rules set a limit of £136.50 a share, and the shares were trading at about £159 around midday on Thursday, up about 2% on Wednesday’s close, according to Yahoo Finance market data. If it makes no acquisition or buyback, Next says it will pay out the surplus through a special dividend or capital distribution.
How does Next compare with other UK fashion retailers?
This has been the busiest week of the autumn for British fashion results, with Primark’s owner reporting on Tuesday, Marks & Spencer on Wednesday, and Next and ASOS on Thursday. The figures are not strictly comparable because their periods differ and each uses its own measure. Even so, they show a market in which UK growth is modest and online is doing most of the work.
| Retailer or tracker | Period | UK measure | Result |
|---|---|---|---|
| Next | 13 weeks to 31 Oct 2026 | UK full price sales | +2.0% (online +4.4%, shops -1.7%) |
| ASOS | Second half to 30 Aug 2026 | UK gross merchandise value | +2% (full year -2%) |
| Primark | 52 weeks to 12 Sep 2026 | UK sales and like-for-like sales | +2% and +0.5% |
| M&S clothing and home | 26 weeks to 26 Sep 2026 | Sales, against a period hit by a cyber attack | +17.5% |
| BDO fashion tracker | October 2026 | Like-for-like, online and in store | Online +9.0%, in store +2.1% |
M&S’s rise needs reading with care, because it is measured against the months when its online clothing business was shut down by a cyber attack. Chief executive Stuart Machin said clothing and home “fell short of their potential”. ASOS’s second-half gain came before the 6 October attack on its systems, and the ASOS results put the impact since then at about 2–4% of group sales value, most notably in the UK.
Next’s position looks steady rather than spectacular. It delivered the growth it said it would in a quarter with a very poor September. Its UK guidance of 2.0%, however, is below the 3.5% inflation rate recorded in September, although clothing prices may not move in line with the wider index.
What does the Bank of England’s rate rise mean for Next and UK shoppers?
Next’s statement came out before the Bank of England’s decision and says nothing about it. The BBC reported that the Bank raised its base rate from 3.75% to 4% on Thursday, the first increase in more than three years. CPI inflation was 3.5% in the year to September, well above the 2% target.
The move matters because Next had already named this risk. In its September half-year report, it said it expected “a slow, steady decline as the year progresses” in UK spending rather than a sudden fall, and listed its “primary concerns” as “rising inflation, higher mortgage interest costs and a weak employment market”. It added that those worries would be compounded if accompanied by tax increases.
For some households, the effect will be immediate. The BBC, citing UK Finance, said the rise would add £31 a month to a typical tracker mortgage, with about 510,000 tracker customers affected at once. About 470,000 people on variable deals could see around £14 a month more if their lender passes it on.
The rise will not by itself decide Christmas, and the effect on clothing budgets cannot yet be measured. It does, however, weaken the case for assuming that Next’s 2.0% forecast is too cautious, as has often proved the case in previous quarters. Next’s January update will be the first of its statements to cover trading after the rate rise.
What should Next shoppers know?
The statement announces no new charge, UK price rise or service change for UK customers. It does, however, confirm a change to borrowing costs for people who use Next’s credit accounts. It also makes clear that the company sees UK demand as subdued, which matters for anyone waiting on Christmas bargains, though Next has made no statement about discounts.
How does the pay in 3 APR rise work?
Next said in September that the headline APR on pay in 3 accounts would rise from 29.9% to 34.9% for existing customers from the fourth quarter, the quarter that has just begun. New customers have been on the higher rate since mid-July. Thursday’s statement builds the change into its forecasts, and Next said in September that it would add about £4m of interest income a year, of which about £1m falls in this financial year.
Pay in 3 splits the cost into three equal monthly instalments with no interest if every payment arrives on time. Interest is charged only if instalments are missed, and only on the remaining balance for the goods. Anyone who pays on time should therefore see no difference.
For those who miss a payment, the change is modest but real. As a rough guide, an APR of 34.9% works out at about 2.5% a month, or about £2.50 on an outstanding £100, against about £2.20 at 29.9%. That is our approximation, so customers should check their own account terms.
The sums involved are growing. Pay in 3 balances stood at £142.8m at the end of July, up from £104.1m a year earlier, according to the half-year report, and Next has 3.4 million UK credit customers. Other checkout credit products have also changed this year, with new buy now, pay later affordability checks applying to regulated plans, so shoppers comparing options should check which rules cover each one.
- Set a payment reminder before the Christmas peak, because interest applies only after a late or missed instalment.
- Check the APR on your own statement, as the date of the change may depend on your account.
- Compare the cost with any other credit you hold, particularly if you are likely to carry a balance.
What does this mean for UK sellers and independent retailers?
Next’s weekly chart gives smaller fashion and homeware retailers a useful benchmark for their own autumn numbers. A sharp September dip followed by an October rebound appears to have been a market-wide weather effect, so a shop that saw the same shape has less reason to assume it lost customers. A business that did not see the October recovery may have a different problem.
The third-party figures are also worth watching. Growth of 4.0% for other brands on Next’s UK site, down from 9.5%, suggests that even a well-run marketplace-style platform is finding UK demand harder to come by. Sellers should be wary of assuming that adding another sales channel will produce growth automatically.
Next’s overseas push offers a further lesson for exporters. Its growth has been fuelled by a 67% rise in marketing spend, and only about 15p of each additional pound in the quarter reached profit before the extra costs were counted. Next can absorb that and adjust its warehousing, but a small British seller shipping to EU customers needs to check its margin after duty, handling fees and advertising.
Independent high street shops face a separate challenge. Next’s stores fell 1.7% despite new space, and BDO’s in-store figure for October, at 2.2%, was below the rate of inflation. This suggests that physical retail is still under pressure even in a good month, and that independent shops may need to rely on local service, collections and events rather than simple footfall recovery.
What happens next?
Next’s next scheduled update is on Wednesday 6 January 2027, when it will report sales up to Saturday 26 December 2026. That will show whether 2.0% UK growth was the right call for the Christmas quarter and whether overseas growth has eased towards the 20.5% forecast.
Before then, three events will give some indication of how UK demand is holding up. Black Friday falls on 27 November and comes with closer scrutiny of discount claims this year. Further monthly BDO and ONS retail data will show whether October’s rebound held, and the new interest rate will begin to reach tracker mortgage payments.
Investors will also watch how Next deals with the remaining £136m, and whether the current share price means a special dividend. Shoppers have a simpler test: whether the winter ranges bought in October are still on the rails at full price when the first Christmas discounts appear.
Frequently asked questions
How much did Next’s sales rise in the third quarter?
Next’s total full price sales rose 8.1% in the 13 weeks to 31 October 2026 compared with the same period last year. That was £33m ahead of the 5.8% it had guided for the second half. UK sales rose 2.0% and overseas online sales rose 32.2%.
Did Next raise its profit forecast in November 2026?
No. Next kept its full-year pre-tax profit forecast at £1,255m, up 8.4%. The £5m of additional profit from the extra sales was offset by higher international operating costs, including new EU tariffs. It did raise its full price sales forecast, from £6.00bn to £6.03bn.
Why did Next’s UK sales slow?
Next said the slowdown was expected and that growth had been volatile, with unseasonably warm weather hurting September. UK full price sales fell in each of the three weeks from 13 September before rising strongly in October. UK growth was 2.0%, against 3.6% in the first half.
Are Next’s shops closing?
The statement does not announce any closures. Full price sales in Next’s shops fell 1.7% in the quarter, but the company planned to open eight new stores and re-site two this year, according to its half-year report. Its overall space is forecast to grow by about 1.3%.
Is Next’s pay in 3 interest rate going up?
Next plans to raise the headline APR from 29.9% to 34.9% for existing customers from the fourth quarter of its financial year, which began after 31 October. New customers have paid the higher rate since mid-July 2026. Interest applies only when instalments are not paid on time, and only on the remaining balance.
Will EU tariffs make Next more expensive in the UK?
The statement announces no UK price rise because of the tariffs. They apply to online orders placed in the EU and filled with stock imported from outside the bloc. Next expects a net cost of about £5m this year and plans to mitigate it through operational changes and selective modest EU price rises.
When is Next’s Christmas trading statement?
Next is scheduled to report on Wednesday 6 January 2027, covering sales up to Saturday 26 December 2026. It currently expects full price sales to rise 5.8% in the fourth quarter, including 2.0% growth in the UK and 20.5% overseas.
How did the market react to Next’s update?
Next’s shares were trading at about £159 around midday on 5 November, up about 2% on the previous close, according to Yahoo Finance market data. That is above the £136.50 limit Next has set for share buybacks, so it may pay out surplus cash through a special dividend or capital distribution instead.