Next PLC (LON: NXTL) share price surged to a record high as the company continued its remarkable growth. The stock surged to a high of 8,526p, 40% above the lowest level in January last year. It has outperformed the key indices like the FTSE 100 and FTSE 250.
Growth continuesNext PLC’s business continued booming even as companies like JD Sports underperformed. For one, the company upgraded its guidance for the fifth straight time as demand remained at an elevated level.
In its trading statement on Thursday, the company said that its full-price sales in the nine weeks to December 30th were better than the expected. These sales rose by 5.7% compared to the same period in 2023. In actual terms, this amounted to about £38 million.
Therefore, the management decided to increase its full-year profit before tax guidance by £2 million to £905 million. Most importantly, the management also increased its guidance for 2024 as it expects a more robust year.
Next PLC attributed this growth to two key factors. Wages in the UK have grown at a faster pace than inflation, which is a positive sign. At the same time, inflation in its key products has not grown recently.
At the same time, the management noted that the weakness in the labor market was a major risk. The other challenge was the supply chain and mortgage risks. On Thursday, the company warned that the crisis at the Red Sea will likely have an impact on its operations since it relies on it to bring goods to the UK.
Next PLC’s performance mirrors that of other retailers like Sainsbury’s, Marks and Spencer, and Tesco, which outperformed the FTSE 100 index in 2023. It also diverged with fast-fashion companies like Boohoo and Asos, which have plunged by double-digits in the past two years.
Next share price outlook
Turning to the daily chart, we see that the Next PLC stock price has been in a strong uptrend in the past few months. These gains are in line with my last Next forecast. This year, the shares have managed to flip the key resistance level at 8,282p into a support level. This was a notable price since it was its previous all-time high.
Next shares have remained above the 50-day and 100-day Exponential Moving Averages (EMA), which is a positive sign. The Relative Strength Index (RSI) has moved to the overbought point at 70. Therefore, the outlook for the shares is positive, with the next point to watch being at 9,000p. However, we could also see some profit-taking in the coming weeks.
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