Shares of FTSE 100-listed Next PLC (GB:NXT) surged over 8% as of writing after the company delivered a solid performance in Q2 2024. In the second quarter, the company’s full-price sales increased by 3.2% year-over-year, surpassing the company’s expectations by £42 million. Additionally, Next increased its full-year profit guidance from £960 million to £980 million. The projected profit growth of £20 million reflects a contribution of £11 million from increased sales and £9 million from cost savings, primarily in logistics.
Next is a well-known UK retail brand recognized for its offerings in clothing, footwear, and home goods.
Next’s International Sales Outshine
In Q2, Next’s performance was boosted by its international online sales, which increased by 21.9% and exceeded the company’s expectations. On the other hand, UK sales grew 0.4% during the quarter. Among other segments, Retail sales were down 4.7% year-over-year in Q2. This was mainly due to tough comparisons, as the business gained from favourable weather conditions last summer.
In the first half, full-price product sales rose 4.4% compared to the previous year and surpassed Next’s initial forecast of a 2.5% increase.
Regarding inventory, the company has adeptly handled excess stock, commencing the sale season with a 21% rise in surplus compared to last year.
Analysts at RBC Capital praised Next’s results. They believe this could signal a rise in consumer spending on clothing this autumn and is a favourable indicator for the retail sector.
Are Next Shares a Buy?
NXT stock has received a Hold consensus rating, backed by Hold recommendations from all four analysts covering the stock. The Next share price forecast is 8,940p, which is 9.3% below the current trading levels.
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