NEXT Share Price Rose 3.33% on Upbeat Final Results for 2023/24

The NEXT plc (LON: NXT) share price rose 3.33% after the company released its final results for the 2023/24 financial year ended 27 January 2024. The company reported a 4.0% increase in full-price sales and a 5.9% rise in overall Group sales, including its subsidiaries. The company's profit before tax reached £918 million, marking a 5.0% growth.

This figure surpasses the previously projected £915 million, primarily due to higher-than-anticipated clearance sales in January. Furthermore, the company recognised a significant non-cash, exceptional gain of £109 million from the acquisition of Reiss, though this was not included in the main profit figures.

Looking forward to next year, NEXT anticipates 2.5% growth in underlying full-price sales and a 6.0% increase in total Group sales. The profit forecast for the NEXT Group is set at £960 million, up by 4.6%, with a predicted rise in post-tax Earnings Per Share (EPS) of 4.8%, reaching 606.3p.

Beginning the year on a positive note, NEXT has never been more optimistic at the start of a financial year, achieving unprecedented revenue and profit levels. The company is excited about new growth opportunities and maintaining a manageable cost base.

Reflecting on the past seven years, the company acknowledges its significant evolution, marking the commencement of a new chapter. The process of articulating future plans and priorities has been challenging but ultimately rewarding, forcing a comprehensive reflection on the company's growth drivers and strategic focus.

This period of reflection emphasises the company's financial objective to sustain long-term growth in EPS as the primary method for enhancing shareholder value. An analysis of the company's EPS growth since 1997 reveals two distinct phases: a ‘glorious' twenty-year period of growth followed by a more challenging phase from 2017 onwards.

Initially, the company enjoyed profitable growth through retail expansion, increased Directory/Online customers, and product diversification, returning £4.4 billion in surplus cash to shareholders. However, the growth formula began to falter in 2017 due to the cannibalisation of retail sales by online growth and increased competition, compounded by the pandemic and economic pressures. 

Despite these challenges, NEXT has managed a commendable performance, with a 16% profit increase through strategic adjustments to its retail cost base and successful online growth initiatives.

NEXT share price. 

The NEXT share price rose 3.33% to trade at 8780.0p from Wednesday’s closing price of 8497.0p.