Fashion and home furnishings retailer Next has reported a positive fourth quarter as overseas sales deliver unexpected boost.

According to its latest trading update for the nine weeks to 28 December 2024, Q4 sales rose 6% with UK sales up 2.5% as online revenues increased 6.1%. Retail store sales declined 2.1%, while online overseas sales rose 31.4%.

“There are two elements of our performance worth highlighting,” Next said. “Firstly, growth in the UK was in line with the performance for the rest of the year, but Online sales growth increased at the expense of growth in our Retail stores. Secondly, and unexpectedly, our sales growth overseas accelerated in the run up to the holiday period.”

Sales for the year to date are up 5.6%, with UK sales growing 2.5% and overseas sales up 23.9%. Total online UK sales are up 5.2% while store revenues are down 1.1%.

Guidance for the full year for 2024/25 see expected sales growth of 5.5% to £5.05bn, while pre-tax profit is expected to reach £1,010m, up 10%.

Looking at the year ahead for 2025/26, Next said it expects sales to rise 3.5% to £5.22bn, with pre-tax profit resulting at £1,046m, a growth of 3.6%. UK sales are expected to rise 1.4% while overseas sales growth is estimated to increase 14%.

“We believe that UK growth is likely to slow, as employer tax increases, and their potential impact on prices and employment, begin to filter through into the economy,” Next said.

“We anticipate that growth overseas will moderate from the +24% we have achieved this year to +14% in the year ahead. In the current year, overseas sales benefited from an +85% step change in marketing expenditure, funded by some price increases. We do not believe we can profitably increase our overseas marketing expenditure by the same percentage next year, and expect the growth to be closer to +20%.”