I’ll be trustworthy and say I don’t perceive the Subsequent (LSE: NXT) share price. Whereas large excessive avenue names fall and extra retailers get boarded up, the FTSE 100-listed clothes and homewares retailer goes from energy to energy, as do its shares.

In 2024, Ted Baker, Muji and The Physique Store went underneath (though the latter has bounced again underneath a brand new proprietor). Mike Ashley’s conglomerate Frasers Group has shuttered some acquired chains/e-shops too and its luxurious Flannels operation has faltered. Sports activities Direct continues to shine for it, however the group remains to be being demoted to the FTSE 250.

But Subsequent retains powering forward. Its shares are up 70.59% over two years and 23.09% over 12 months. So what’s its secret?

Can this FTSE 100 inventory preserve smashing it?

Good administration is one reply. There’s much more to this enterprise than that Subsequent itself. It’s taken benefit of the retail rot to snap up Joules and MADE, and constructed giant fairness stakes in JoJo Maman Bébé, Reiss and FatFace.

Subsequent’s Complete Platform enterprise has introduced in a brand new line of revenues, because it supplies advertising, warehousing and distribution providers to third-party companies.

On 30 October the group posted a bumper Q3, as full-price gross sales surged 7.6% within the 13 weeks to 26 October, smashing its 5% forecast. This was boosted by a chilly snap that had customers racing to purchase winter put on. Even the climate is a tailwind for Subsequent.

The board additionally upgraded This fall steerage, which introduced additional cheer as this can embody the essential Christmas buying and selling interval.

It now forecasts 2024/25 gross sales of £5.02bn, barely up from its earlier £4.98bn forecast. It expects pre-tax income to climb 9.5% to just a little over £1bn.

2025 could possibly be even more durable for retailers

I’ve admired Subsequent for years however by no means purchased them. I wrongly determined they couldn’t maintain their outperformance. Have I left it too late to play catch up?

As a rule, I hate shopping for shares after they’ve had an excellent run. I’m frightened the momentum will run out simply as I take a belated place. I missed out with Subsequent, however as ever with investing, there’s no laborious and quick rule. I used to be sensible to shun Frasers after its shares had rocketed 200% briefly order. They’re down 30% during the last 12 months.

I believe 2025 might be even more durable for retailers. After a brilliant first half, the UK economic system is slowing, and that’s earlier than Finances hikes to employer’s Nationwide Insurance coverage contributions kick in subsequent April. Subsequent employs greater than 30,000 individuals. Rising the nationwide minimal wage by an inflation-busting 6.7% will add to the retail squeeze and Subsequent received’t be immune.

Greater inflation and rates of interest received’t assist both. No surprise Subsequent shares have been unstable in latest months.

The 18 analysts providing one-year share price forecasts have set a median goal of 10,470p. If appropriate, that’s up simply 4.44% from right now’s 10,025p. 5 brokers identify Subsequent a Sturdy Purchase however 13 say Maintain and I’m with them. Besides I don’t maintain it.

Subsequent shares look pretty valued buying and selling at 15.46 occasions earnings however I believe they could battle to take care of their momentum in 2025. I received’t purchase them right now.