NEXT (NXT) H2 2025 (Q&A) earnings summary

Executive summary

• Enhanced partnership with Zalando aims to expand reach, especially in Eastern Europe, but no sales uplift or disruption is built into H2 guidance due to expected transition challenges.

• New store formats will be used for future openings, not retrofitted to existing stores; RFID is used on security tags for efficiency but not on all garments due to cost.

• International marketing spend is increasing by 25%, mainly in existing territories, with the largest percentage increases in new markets; focus remains on achieving a 50% return on investment within 18 months.

• Third-party aggregator sales are growing faster internationally than direct website sales, with stock availability and logistics being key to success.

• Home segment sales are recovering after a post-COVID downturn, showing encouraging trends.

Outlook and guidance

• No sales uplift or disruption from the Zalando partnership is included in H2 forecasts; cautious approach due to potential transition impacts.

• Surplus cash for the year will be returned to shareholders, but future returns will be gradual to maintain investment-grade credit rating.

Segment performance

• Overseas business margins are not expected to rise above current year levels due to faster growth of lower-margin aggregator sales compared to own sites.

• Third-party business overseas is smaller, with growth focused on wholly owned brands.