Next hikes outlook after sales boosted by weather and M&S woes
In the UK, sales jumped by 7.8% in the second quarter as the group said it was boosted by 'better than expected weather and trading disruption at a major competitor'.
M&S had to suspend online trading for nearly two months from mid-April after it was hit by a major hack.
Next said the recent performance and forecasts for better-than-forecast second half trading means it now expects full-year sales to rise by 7.5% and for profits to increase by 9.3% to £1.11 billion.
It had previously pencilled in sales growth of 6% and for profits to lift by 6.8%.
The upgrade marks the group's third in just five months.
But Next said it 'remains cautious for the second half', stressing that the improved outlook is for its international arm over the next six months.
It said: 'In the UK, we believe we exceeded expectations in the second quarter as a result of better summer weather and trading disruption at a major competitor.
'We do not expect either of these factors to have a material effect in the second half, and so we are not increasing our guidance for UK sales in the second half.'
It believes sales growth in the UK will slow sharply to 1.9% as the jobs market starts to falter following the Government's move to hike National Insurance contributions for employers, at the same time as rising the minimum wage.
Next said: 'We expect UK employment opportunities to continue to diminish as we enter the second half, with the effects of April's National Insurance changes continuing to filter through into the economy as the year progresses.
'We believe that this will increasingly dampen consumer spending as the year progresses.'
But an online marketing push for its international arm is bearing fruit, helping drive sales 28.1% higher in the first half and with growth of 19.4% now expected in the final six months.
The results come after Next announced late on Wednesday that it had bought Seraphine – the maternity fashion firm, whose clothes were worn by the Princess of Wales during her pregnancies – after it recently collapsed into administration.
Next paid £600,000 for the brand and announced it was bringing back Seraphine's founder Cecile Reinaud as an adviser to help relaunch the fashion label.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
an hour ago
- Reuters
Asia's factory activity worsens as US trade uncertainty bites
TOKYO, Aug 1 (Reuters) - Asia's factory activity deteriorated in July as soft global demand and lingering uncertainty over U.S. tariffs weighed on business morale, private sector surveys showed on Friday, clouding the outlook for the region's fragile recovery. The surveys were taken before Japan and South Korea clinched trade deals with Washington, offering some hope that receding uncertainty could prop up manufacturing activity in coming months, some analysts say. Factory activity shrank in export power-houses Japan and South Korea, surveys for July showed, underscoring the challenge Asia faces as President Donald Trump's policies threaten the global free trade system the region relied upon for growth. China's factory activity also deteriorated in July as softening business growth led manufacturers to scale back production, boding ill for the region's economy. The S&P Global China General Manufacturing PMI fell to 49.5 in July from 50.4 in June, undershooting analysts' expectations of 50.4 in a Reuters poll and dropping below the 50 threshold that separates growth from contraction. The reading comes a day after an official survey showed China's manufacturing activity shrank for a fourth straight month in July, suggesting a surge in exports ahead of higher U.S. tariffs has started to fade while domestic demand remained sluggish. The survey "provides further evidence that China's economy lost some momentum last month, largely due to domestic weakness," said Zichun Huang, an economist at Capital Economics. The S&P Global Japan manufacturing purchasing managers' index (PMI) also fell to 48.9 in July from 50.1 in June, a sign U.S. tariffs were hurting the world's fourth-largest economy. Most of the survey data was collected before the announcement of a Japan-U.S. trade agreement last month, which lowers tariffs imposed on Japan to 15% from a previously threatened 25%. As the trade deal with Washington kicks in, "it will be important to see if this will translate into greater client confidence and improved sales in the months ahead," said Annabel Fiddes, economics associate director at S&P Global Market Intelligence, which compiles the survey. South Korea also saw factory activity contract in July for the sixth straight month with the S&P Global PMI falling to 48.0 in July, from 48.7 in June. "Both production volumes and new orders fell at a steeper rate than that in June, with anecdotal evidence indicating that weakness in the domestic economy was compounded by the impacts of U.S. tariff policy," said Usamah Bhatti, economist at S&P Global Market Intelligence. The survey was conducted from July 10 to July 23, before South Korea reached on Wednesday a trade deal with the U.S. lowering tariffs to 15% from a threatened 25%. Factory activity in July expanded in the Philippines and Vietnam, but shrank in Taiwan, Indonesia and Malaysia, PMIs showed.
Reuters
3 hours ago
- Reuters
China's manufacturing activity shrinks as exports drag, S&P PMI shows
BEIJING, Aug 1 (Reuters) - China's factory activity deteriorated in July, as a softening of new business growth led manufacturers to scale back production, a private-sector survey showed on Friday. The S&P Global China General Manufacturing PMI fell to 49.5 in July from 50.4 in June, undershooting analysts' expectations of 50.4 in a Reuters poll. The 50-mark separates growth from contraction. The reading, combined with Thursday's official survey, bodes ill for growth momentum at the start of the third quarter, following robust growth in the first half of the year. Amid a trade truce with Washington, economists say the support of exports front-loading ahead of higher U.S. tariffs to the world's second-biggest economy may fade over the remainder of the year. According to the S&P Global survey, new export orders contracted for a fourth straight month and at a faster pace than in June. After rising in June, manufacturing output declined in July. Firms looked to utilise their current stock holdings for the fulfilment of orders, which contributed to a second successive monthly decline in post-production inventories. Falling production together with a stable backlog prompted factory owners to lower their headcount in July. Firms also said cost concerns had underpinned decisions to shed staff. However, business sentiment improved at the start of the second half of 2025 but was still below the series average. Manufacturers expected better economic conditions and promotional efforts to spur sales in the year ahead. As Beijing started to tackle "price wars" among manufacturers, average input prices increased for the first time in five months. Firms nevertheless lowered their selling prices again as competition for new business intensified. But export charges increased at the fastest pace in a year due to rising shipping and logistics costs. Top leaders on Wednesday pledged to support an economy that is facing various risks, by managing what is viewed as disorderly competition in the second half of the year. Markets expected that Beijing may be about to start a new round of factory capacity cuts in a long-awaited but challenging campaign against deflation. From July, Caixin no longer sponsors the S&P Global China PMI.
Reuters
4 hours ago
- Reuters
Coinbase quarterly profit falls on trading dip, shares fall
July 31 (Reuters) - Coinbase Global (COIN.O), opens new tab reported a drop in adjusted profit for the second quarter on Thursday, as gains in subscription and services revenue were offset by weaker trading activity amid reduced cryptocurrency volatility. Retail crypto trading volumes remained sluggish in the second quarter as investor appetite remained muted amid market uncertainty and inflationary pressures, despite a rebound in crypto prices. A bullish crypto market also prompted many retail investors to hold on to their digital assets in anticipation of higher returns, limiting trading activity. Crypto asset volatility was down 16% on a sequential basis, the company said. Transaction revenue fell 2% to $764.3 million from a year earlier. However, revenue from the company's subscription and services unit — which includes businesses outside of trading — rose 9.5% to $655.8 million. Shares of the company, which have gained nearly 54% in 2025 on crypto enthusiasm and its addition to the benchmark S&P 500 index, fell 6.8% in extended trading. Adjusted net income came in at $33.2 million, or 12 cents per share, in the three months ended June 30, compared with $294.4 million, or $1.10 apiece, a year earlier. Net profit, which surged compared to the year-ago period, was largely driven by gains from the fair value remeasurement of the company's investment in stablecoin issuer Circle (CRCL.N), opens new tab and gains from its crypto asset investment portfolio, Coinbase said. A portion of Coinbase's subscription and services revenue is derived from stablecoin holdings and related platform activities. The company also benefited from optimism surrounding the stablecoin legislation passed during the quarter. Stablecoin revenue came in at $332.5 million in the second quarter, up from $240.4 million in the year earlier. The U.S. House of Representatives passed the "Guiding and Establishing National Innovation for U.S. Stablecoins Act," or the GENIUS Act, earlier this month, sending the bill to President Donald Trump, who signed it into law. The Genius Act aims to create a regulatory framework for stablecoins and promote broader adoption. "These bills provide a clear regulatory foundation for stablecoins and digital assets, potentially unlocking new opportunities for Coinbase," the company said in a letter to shareholders, referring to the Genius Act and the Clarity Act. The Clarity Act, if enacted, would help define whether a cryptocurrency qualifies as a security or a commodity — clarifying the jurisdiction of the Securities and Exchange Commission (SEC) over the sector. "And they're still sitting on a war chest of $9.3 billion in USD resources and another $1.8 billion in crypto investment assets. That's not dry powder — that's a full-blown arsenal," said David Bartosiak, stock strategist at Zacks Investment Research
