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Investing.com -- Next PLC (LON:NXT) on Wednesday reported a 10.5% increase in full price sales for the third quarter ended October 25, exceeding its guidance of 4.5% growth by £76 million.
The UK retailer saw domestic sales rise 5.4%, outperforming its 1.9% guidance despite being lower than the 7.6% growth achieved in the first half. International sales surged 38.8%, significantly ahead of the company’s 19.4% forecast and the 28.1% growth seen in the first half.
Based on these strong results, Next has raised its fourth-quarter sales growth guidance from 4.5% to 7.0%, adding £36 million to its forecast. The company also increased its full-year profit before tax guidance by £30 million to £1,135 million, representing a 12.2% increase versus last year.
In the UK, Next attributed the better-than-expected performance to improved stock levels compared to last year, when deliveries were delayed by disruption in Bangladesh and constraints in global freight capacity.
International growth was driven by higher digital marketing expenditure, which increased 50% versus previous guidance of 25%. The company also benefited from consolidating its European stockholding operations, which significantly improved stock availability for its business on Zalando.
For the fourth quarter, Next expects UK sales growth to moderate to 4.1%, while international online sales growth is projected to slow to 24.3% as it annualizes strong prior-year performance.
The company anticipates generating around £425 million of surplus cash this year. Having already returned £131 million to shareholders through share buybacks, Next plans to distribute remaining surplus cash via a special dividend of approximately £3.10 per share at the end of January 2026, assuming no further acquisitions or buybacks.
Next’s interim dividend of 87p per share will be paid on January 5, 2026. The company will provide its next trading update on January 6, 2026.