Will FTSE 100 giant Next continue to top the retail leaderboard?

Next will unveil its full-year earnings this coming Thursday as investors gear up to see how the FTSE 100 firm has navigated a challenging period for retailers. 

The high street success story has already raised its profit guidance five times in the last year.

After a bumper Christmas, the business said it expected to report a profit before tax of £905m for the year, up £20m on initial projections.

Russ Mould, investment director at AJ Bell, said: “While many retailers have whinged about the British weather in 2023, dished out profit warnings, or both, the FTSE 100 firm has got on with the job.”

“According to the Christmas trading update, online sales were once more outperforming those generated in the brick-and-mortar stores, while finance interest income remained a valuable contributor.”

“Note that just 26 per cent  of the stores now reside in city centres, with 63 per cent situated in retail parks and the rest in regional shopping centres.”

Next, led by City grandee Lord Simon Wolfson, is also currently running a share buyback scheme. 

It spent £167m on this in the first six months of the year to January 2024, and management’s interim presentation in September looked to have pencilled in a similar sum for the second half.

The business, which has made a name for itself in recent years by snapping up ailing retailers, has become one of the major players in the retail game. 

In the last three years, the company has acquired Made.com, Joules, JoJo Maman Bebe and Cath Kidston to name a few. 

It has also built a 72 per cent stake in retailer Reiss and formed a joint venture with American lingerie group Victoria Secret.

Its frontman Wolfson has spent the last four years transforming Next’s reputation from frumpy high street stores into one of the strongest players in both the digital and physical retail space. 

Thursday’s update comes amid a challenging time for retailers as many are struggling to attract customers amid the cost of living crisis. 

Wolfson also previously raised concerns that blocks in the Suez Canal – an important trade route in Egypt – could lead to delays in its stock delivery. 

In January, Next said:  “Difficulties with access to the Suez Canal, if they continue, are likely to cause some delays to stock deliveries in the early part of the year.”