Next to reveal jump in profit despite rising costs and trade war uncertainty
Next is expected to post rising profits next week despite a string of costs increases hitting retailers and broader concerns about UK consumer confidence.
The retail giant will reveal its first quarter results on May 8, hot on the heels of profits of more than £1 billion last year.
Next, which has more than 450 stores across the UK, reported pre-tax profits of £1.01 billion for the year to January, up 10% compared with the previous year.
Its boss, Lord Simon Wolfson, said trading in the opening part of this financial year had been better than expected at the recent update.
Next raised its guidance for 2025-26 in response, pencilling in sales growth of 5% to £5.3 billion and profits up 5.4% to £1.07 billion.
But Next, like other retailers, has had to contend with a slew of cost increases since it posted its full-year results in March.
National insurance contributions (Nics), a tax which makes it more expensive to employ people, went up in April, along with the minimum wage.
Meanwhile, UK consumer confidence has also fallen to the lowest level in more than a year amid concerns that Donald Trump's trade tariffs could push up living costs, according to a recent poll by data company GfK.
And Next, which sells its products online to the US market, could also see a knock-on impact from Mr Trump's tariffs on sales.
Russ Mould, an analyst at AJ Bell, said Next has a 'knack of exceeding expectations – a knack it demonstrated again in March when chief executive Simon Wolfson nudged up expectations for full-price sales and pre-tax profits for the year to January 2026'.
He added: 'That positive steer has helped take Next's shares to new all-time highs, despite wider stock market volatility.'
Shares were up 27% for the year-to-date on Friday.
Next has already said it will have to raise prices by around 1% to offset the impact of Nics and minimum wage increases.
Its first quarter results come amid a string of cyber attacks against UK retailers, with Marks & Spencer and Harrods facing issues in recent days.
As of Friday morning, M&S was unable to process online orders after shutting down parts of its online systems to deal with a 'cyber incident'.
M&S first reported the issue over the Easter weekend but has seen its operations impacted for more than a week.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Glasgow Times
30 minutes ago
- Glasgow Times
Rachel Reeves fails to rule out future tax rises as economy shrinks
The Chancellor has repeatedly said that the cost of Wednesday's spending review is covered by the tax rises she brought in last year, saying departments must now 'live within their means'. But economists have warned that a weakening economy and additional commitments such as reversing much of the cut to winter fuel payments mean taxes are likely to go up again in the autumn. Asked on Thursday whether she could guarantee there would be no further tax rises, Ms Reeves told LBC: 'I think it would be very risky for a Chancellor to try and write future budgets in a world as uncertain as ours.' But she again repeated her promise that she would not need to increase taxes on the same scale as last year, when she put them up by £40 billion. And she rejected the suggestion that she was a 'Klarna Chancellor' who had announced a 'buy now, pay later' spending review. She said: 'The idea that yesterday I racked up a bill that I'm going to need to pay for in the future, that's just not right.' Her comments come as the Office for National Statistics reported that the economy shrank by 0.3% in April – the biggest monthly contraction since October 2023 and worse than the 0.1% fall most economists had expected. In recent days, both Ms Reeves and Number 10 have said the economy is beginning to turn a corner, allowing them to fund the U-turn on the winter fuel allowance. But Thursday's worse-than-expected economic news will make it harder for Ms Reeves to balance her spending commitments with Labour's promises on tax and borrowing. The Chancellor acknowledged that the reduction in GDP was 'disappointing', and blamed 'uncertainty' caused by Donald Trump's announcement of sweeping tariffs at the start of April for much of the fall. But opposition parties have laid the blame squarely with the Government, with Conservative shadow chancellor Sir Mel Stride accusing Ms Reeves of 'economic vandalism'. He said: 'Under Labour, we have seen taxes hiked, inflation almost double, unemployment rise, and growth fall. With more taxes coming, things will only get worse and hard-working people will pay the price.' Daisy Cooper, the Liberal Democrats' Treasury spokeswoman, said the figures should act as 'a wake-up call for the Government which has so far refused to listen to the small businesses struggling to cope with the jobs tax' and urged ministers to pursue a 'bespoke UK-EU customs union' to compensate for the impact of US tariffs. The GDP figures come a day after the Chancellor revealed her spending plans for the coming years, including a significant increase in spending on the NHS, defence and schools. The biggest winner was the NHS, which will see its budget rise by £29 billion per year in real terms, leading the Resolution Foundation's Ruth Curtice to say Britain was slowly morphing into a 'National Health State'. But that rise came at the price of real-terms cuts elsewhere, including the Home Office, the Department for Transport and the Department for the Environment, Food and Rural Affairs. On Thursday, Ms Reeves rejected claims that her decision on policing, which will see forces' 'spending power' increase by 2.3% above inflation each year, would mean cuts to frontline police numbers.
South Wales Guardian
30 minutes ago
- South Wales Guardian
Rachel Reeves fails to rule out future tax rises as economy shrinks
The Chancellor has repeatedly said that the cost of Wednesday's spending review is covered by the tax rises she brought in last year, saying departments must now 'live within their means'. But economists have warned that a weakening economy and additional commitments such as reversing much of the cut to winter fuel payments mean taxes are likely to go up again in the autumn. Asked on Thursday whether she could guarantee there would be no further tax rises, Ms Reeves told LBC: 'I think it would be very risky for a Chancellor to try and write future budgets in a world as uncertain as ours.' But she again repeated her promise that she would not need to increase taxes on the same scale as last year, when she put them up by £40 billion. And she rejected the suggestion that she was a 'Klarna Chancellor' who had announced a 'buy now, pay later' spending review. She said: 'The idea that yesterday I racked up a bill that I'm going to need to pay for in the future, that's just not right.' Her comments come as the Office for National Statistics reported that the economy shrank by 0.3% in April – the biggest monthly contraction since October 2023 and worse than the 0.1% fall most economists had expected. In recent days, both Ms Reeves and Number 10 have said the economy is beginning to turn a corner, allowing them to fund the U-turn on the winter fuel allowance. But Thursday's worse-than-expected economic news will make it harder for Ms Reeves to balance her spending commitments with Labour's promises on tax and borrowing. The Chancellor acknowledged that the reduction in GDP was 'disappointing', and blamed 'uncertainty' caused by Donald Trump's announcement of sweeping tariffs at the start of April for much of the fall. But opposition parties have laid the blame squarely with the Government, with Conservative shadow chancellor Sir Mel Stride accusing Ms Reeves of 'economic vandalism'. He said: 'Under Labour, we have seen taxes hiked, inflation almost double, unemployment rise, and growth fall. With more taxes coming, things will only get worse and hard-working people will pay the price.' Daisy Cooper, the Liberal Democrats' Treasury spokeswoman, said the figures should act as 'a wake-up call for the Government which has so far refused to listen to the small businesses struggling to cope with the jobs tax' and urged ministers to pursue a 'bespoke UK-EU customs union' to compensate for the impact of US tariffs. The GDP figures come a day after the Chancellor revealed her spending plans for the coming years, including a significant increase in spending on the NHS, defence and schools. The biggest winner was the NHS, which will see its budget rise by £29 billion per year in real terms, leading the Resolution Foundation's Ruth Curtice to say Britain was slowly morphing into a 'National Health State'. But that rise came at the price of real-terms cuts elsewhere, including the Home Office, the Department for Transport and the Department for the Environment, Food and Rural Affairs. On Thursday, Ms Reeves rejected claims that her decision on policing, which will see forces' 'spending power' increase by 2.3% above inflation each year, would mean cuts to frontline police numbers.
Rhyl Journal
30 minutes ago
- Rhyl Journal
Rachel Reeves fails to rule out future tax rises as economy shrinks
The Chancellor has repeatedly said that the cost of Wednesday's spending review is covered by the tax rises she brought in last year, saying departments must now 'live within their means'. But economists have warned that a weakening economy and additional commitments such as reversing much of the cut to winter fuel payments mean taxes are likely to go up again in the autumn. Asked on Thursday whether she could guarantee there would be no further tax rises, Ms Reeves told LBC: 'I think it would be very risky for a Chancellor to try and write future budgets in a world as uncertain as ours.' But she again repeated her promise that she would not need to increase taxes on the same scale as last year, when she put them up by £40 billion. And she rejected the suggestion that she was a 'Klarna Chancellor' who had announced a 'buy now, pay later' spending review. She said: 'The idea that yesterday I racked up a bill that I'm going to need to pay for in the future, that's just not right.' Her comments come as the Office for National Statistics reported that the economy shrank by 0.3% in April – the biggest monthly contraction since October 2023 and worse than the 0.1% fall most economists had expected. In recent days, both Ms Reeves and Number 10 have said the economy is beginning to turn a corner, allowing them to fund the U-turn on the winter fuel allowance. But Thursday's worse-than-expected economic news will make it harder for Ms Reeves to balance her spending commitments with Labour's promises on tax and borrowing. The Chancellor acknowledged that the reduction in GDP was 'disappointing', and blamed 'uncertainty' caused by Donald Trump's announcement of sweeping tariffs at the start of April for much of the fall. But opposition parties have laid the blame squarely with the Government, with Conservative shadow chancellor Sir Mel Stride accusing Ms Reeves of 'economic vandalism'. He said: 'Under Labour, we have seen taxes hiked, inflation almost double, unemployment rise, and growth fall. With more taxes coming, things will only get worse and hard-working people will pay the price.' Daisy Cooper, the Liberal Democrats' Treasury spokeswoman, said the figures should act as 'a wake-up call for the Government which has so far refused to listen to the small businesses struggling to cope with the jobs tax' and urged ministers to pursue a 'bespoke UK-EU customs union' to compensate for the impact of US tariffs. The GDP figures come a day after the Chancellor revealed her spending plans for the coming years, including a significant increase in spending on the NHS, defence and schools. The biggest winner was the NHS, which will see its budget rise by £29 billion per year in real terms, leading the Resolution Foundation's Ruth Curtice to say Britain was slowly morphing into a 'National Health State'. But that rise came at the price of real-terms cuts elsewhere, including the Home Office, the Department for Transport and the Department for the Environment, Food and Rural Affairs. On Thursday, Ms Reeves rejected claims that her decision on policing, which will see forces' 'spending power' increase by 2.3% above inflation each year, would mean cuts to frontline police numbers.
