# Next reveals £15m cost hit from Iran war and warns prices may need to rise

By Aarin Chiekrie — 2026-03-26

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Next delivered its full-year results in style as pre-tax profit growth of 14.5 per cent edged ahead of its recently upgraded guidance.

“The strong performance was driven by better-than-expected UK sales and continued high double-digit growth in overseas markets.

“Quality over quantity is what consumers want, leading them to buy slightly fewer, higher-priced, better-quality items.

“With its wide range of customers, that’s playing into Next’s strengths, helping drive more sales across the board.

“Looking to 2026/27, pre-tax profit growth was always likely to simmer from last year’s level.

“But add a global spike in oil prices, and Next only expects pre-tax profits to grow by 4.5 per cent this year, below market forecasts heading into results.

“The Middle East accounts for around six per cent of the group’s sales, and the conflict is likely to restrict growth in the region.

“For now, Next assumes three months of disruption, bringing £15million of additional costs which it’s been able to offset elsewhere in the business.

“But if the conflict drags beyond this point, we could see higher prices passed on to consumers.

“While some caution is wise, Next has developed a track record of under-promising and over-delivering in recent years.

“And as a leader in the UK market, it’s well-positioned to navigate challenging conditions better than many of its peers.

“Alongside overseas growth potential, strong cash flows and impressive shareholder returns, it remains a good long-term pick for investors looking for exposure to the retail sector.”

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