Though Subsequent recorded spectacular yearly outcomes, different clothes retailers equivalent to H&M continued to battle as UK shoppers stay cautious of their spending.
British multinational clothes large Subsequent revealedon Thursday that its full value gross sales for 2024 elevated 5.8%, whereas complete group gross sales, together with subsidiaries, rose 8.2% to £6.3 billion (€7.6bn). Put up-tax earnings per share additionally superior 9.9%.
Subsequent’s revenue earlier than tax surged 10.1% to simply over £1bn (€1.2bn), with pre-tax earnings per share hovering 11.6%, boosted by share buybacks.
The corporate’s share value rose 6.7% on Thursday morning.
Subsequent famous that full value gross sales had exceeded expectations within the first eight weeks of this yr. It additionally hiked its full value gross sales outlook for the primary half of 2025 by 6.5%, up from a earlier forecast of three.5%. Subsequent expects full yr gross sales to extend by 5%, up from its final steering of three.5%.
The group’s pre-tax revenue outlook for the yr as much as January 2026 was additionally raised by 5.4%, now anticipated to come back to about £1.1bn (€1.3bn).
The retail chain has been doing properly regardless of the general UK economic system lagging significantly within the final a number of months, amid dampened client sentiment and anxieties over sticky inflation and the price of dwelling.
The chain has stayed resilient at the same time as e-commerce rivals equivalent to Asos have seen a lift in demand recently, particularly because the pandemic. This on-line procuring buzz has partly been pushed by elevated entry to the web internationally, in addition to the adoption of digital fee providers.
Subsequent mentioned in its full yr earnings report on its web site: “It’s uncommon for NEXT to start a yr on an optimistic observe, but that was our stance this time final yr. It felt as if the corporate was coming into a brand new period: the worst of the retail-to-online structural shift seemed to be behind us, the pandemic was properly and really over, and the price of dwelling disaster was abating.”
Russ Mould, funding director at AJ Bell, mentioned in a observe: “Subsequent is the envy of the retail sector. As soon as once more it has upgraded gross sales and revenue steering, leaving its rivals within the mud. Subsequent is usually a cautious outfit, preferring to under-promise and over-deliver, which makes its newest optimism a shock given the delicate market backdrop.”
Mould identified that though US tariffs aren’t anticipated to impression the enterprise a lot, a commerce battle might nonetheless weaken client sentiment, which can in flip have an effect on the retail sector. He additionally highlighted that Subsequent was in a greater place than a number of of its rivals to deal with market turbulence, because it was already doing higher than different retailers.
H&M sees gradual first quarter
In distinction to Subsequent’s optimistic replace, H&M reported a fall in gross revenue for the primary quarter of the yr, coming in at SEK 27.2bn (€2.5bn), down from SEK 27.7bn (€2.6bn) in the identical quarter final yr. Internet gross sales grew marginally by 3% within the first quarter.
Working revenue plunged to SEK 1.2bn (€110.9m) within the first quarter of 2025, down from SEK 2.1bn (€194.0m) in Q1 2024. Equally, H&M’s working margin got here as much as 2.2% in Q1 2025, down from 3.9% within the first quarter of 2024.
Mould mentioned: “H&M’s outcomes are proof of the divergent fortunes in retail. Whereas Subsequent is singing from the rooftops, H&M is down within the gutter. It’s not an ideal begin to the yr however the Swedish retailer doesn’t appear too fussed. It says the primary quarter is at all times the smallest contributor by way of gross sales and margin, and that it’s seeing tentative indicators of enchancment.”
He additionally identified that the retailer, like many international rivals, had been shutting shops in favour of extra digital funding, which can have contributed to dampened demand.