British retailer Next lifted its full-year profit outlook Wednesday after strong sales growth offset a sharp rise in costs tied to the ongoing crisis in the Middle East.
The company said robust trading gave it enough room to absorb higher expenses connected to disruptions at the Strait of Hormuz, which has strangled global shipping routes and driven up costs for businesses reliant on imported goods. Bloomberg reported the results, noting that Next joins a small number of retailers that have managed to navigate the supply crunch without cutting their forecasts.
Next is one of Britain's largest clothing and homeware chains, with a substantial sourcing operation dependent on goods manufactured in Asia and moved through global shipping lanes. The disruption to the strait — through which a significant share of world trade passes — has pushed up freight costs and extended delivery times for retailers across Europe.
The upgrade to guidance is a signal that Next's product mix, pricing power, and cost controls have held up better than feared. Retailers with less flexible supply chains or thinner margins have been more vulnerable to the same pressures.
The results come as British consumer spending has shown more resilience than many analysts expected, even as energy costs and import prices rise. Next has historically been viewed as a bellwether for mid-market UK retail demand, making its guidance upgrade a relatively positive data point for the sector at a time when much of the industry is bracing for a difficult year.
The company did not say the cost pressures had disappeared. It acknowledged higher Iran-related costs explicitly in its outlook statement, making clear the improvement was driven by sales outperformance rather than any easing of the underlying disruption. The Strait of Hormuz remains effectively closed to normal commercial traffic, with the Trump administration's naval escort operation paused as of Tuesday pending further negotiations with Tehran.
How long the disruption lasts will shape the rest of Next's year. Peak retail restocking ahead of autumn and winter typically requires significant inbound freight from Asia, and if the strait remains closed or freight rates stay elevated through the summer, the cost cushion Next currently enjoys could narrow.
