Decline in Shares Despite Profit Surge: Next's Stocks Plummet
Next Reports Strong First Half Results, Yet Warns of Economic Headwinds
In a mixed bag of financial news, high street retailer Next has reported a strong performance for the first half of the year, while also issuing a cautionary note about the UK economy.
The company's sales climbed more than 10% to £3.25 billion for the same period, with a 13.8% increase in group profit before tax to £515 million for the six months to 26 July 2025. Post-tax earnings per share at Next jumped nearly 17% to 330p. The retail giant's market cap is over £14bn.
However, Next's full-price sales growth is expected to slow sharply in the second half, from around 10% in Q2 to just 4.5%. This downbeat tone has unnerved investors, causing Next's share price to slip to £115.45 at the time of writing (2pm), its lowest since the beginning of April.
The company attributed the slowdown to weakening job opportunities, regulatory pressures, high government spending, and rising taxes as factors affecting productivity and competitiveness in the UK. In a statement, Next read: "To be clear, we do not believe the UK economy is approaching a cliff edge."
Elsewhere in the retail sector, Pets at Home has issued a profit warning, with its CEO stepping down. This news has added to the uncertainty in the market.
In other leadership changes, 'Proud' Deliveroo founder and CEO is leaving after the DoorDash takeover. Max-Josef Meier has stepped down as CEO of Finn after admitting to misconduct, with Maximilian Wühr taking over as the new CEO.
Next's full-year profit before tax guidance of £1.1bn was left unchanged by the company, and the board of Next declared an interim dividend of 87p per share.
Despite the economic challenges, Next's strong first half results demonstrate the company's resilience in the face of adversity. As the UK economy navigates these headwinds, investors will be closely watching how Next and other retailers adapt and respond.
