Next has upgraded its annual profit forecast for the third time this year after trading “outperformed” in both its UK and overseas businesses.

The retail giant reported full price sales were up 10.5% in the 13 weeks to 26 July, coming in £49m ahead of its original guidance of 6.5% for the period.

As a result, Next expects to deliver a pre-tax profit of £1.105bn for the 2025/26 financial year, up £25m from its original outlook.

Sales are also now forecast to grow 4.5% in the second half – instead of the previously estimated 3.5% – after its international business “grew faster than expected”.

Overseas sales surged 26.4% in the quarter, which it attributed to its digital marketing investment proving “more effective than anticipated”.

Next said it believes it can invest more in profitable digital marketing than it had originally planned as it targets higher growth overseas during the second half of the year.

UK retail sales jumped 7.8%, driven by a 9.5% increase in online revenue and 5.6% growth in stores.

“We believe that the overperformance was largely due to better than expected weather and trading disruption at a major competitor,” Next said.

However, it is maintaining its 1.9% UK sales growth guidance for the second half as it expects the changes to National Insurance to filter through the economy and “increasingly dampen consumer spending as the year progresses”.

Next confirmed this week that it had acquired the branding and intellectual property of maternity group Seraphine out of administration for £600,000.

The retailer said it plans to refocus the business, whose clothing was worn by Catherine, Princess of Wales, on what it does best, “creating stylish, practical solutions for new and expecting mums around the world”.

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