Russ Mould, investment director at AJ Bell, said: “It is hard to think of a company which has mastered the art of being on the stock market better than Next.
“The company consistently pitches its guidance conservatively allowing it to then surpass expectations when it comes time to report on trading.
“Today’s third-quarter update is no exception as sales come in comfortably ahead of expectations once again and, given Next’s habit of under promising and over delivering, it is striking to see another upgrade to full-year profit guidance.
“The company is seeing really impressive growth in sales of third-party brands on its platform and is making meaningful progress with its nascent international business.
“The core brand is also demonstrating resilience in what remains a tricky consumer backdrop, with competitors struggling to match Next’s mastery of the basics of retail.
“It gets the right products in front of customers, whether that’s in-store or online, at an attractive enough price point to keep the tills ringing and uses its store network extremely effectively to help facilitate online sales.
“Next also offers plenty of transparency over how it makes decisions on what to do with its surplus cash and how it goes about returning this to shareholders.
“Given the shares are trading at record levels it’s making the call that a special dividend makes more sense than purchasing its own stock.
“This considered stance is refreshing given many firms will happily launch share buybacks when their shares are making all-time highs.”
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