FTSE 100 firm Subsequent (LSE:NXT) is undoubtedly the UK retail sector’s star performer proper now. Up 0.8% on Wednesday (8 Might), at £12.39, Subsequent’s shares are rising once more because it introduced one other improve to its gross sales and earnings forecasts.

Within the newest of a number of such upgrades during the last 12 months, it predicted that full-price gross sales are will rise 6% within the monetary 12 months ending January 2026. At an anticipated £5.4bn, this represents larger progress than the 5% predicted beforehand.

Complete group gross sales are actually tipped to rise 5% 12 months on 12 months, higher than a beforehand forecast 4.4% improve, to £6.6bn. Consequently, full-year pre-tax revenue of £1.1bn is estimated, up 6.8% from fiscal 2025. Revenue progress was tipped at 5.4% beforehand.

Dealer upgrades coming

Subsequent’s improve comes after it introduced better-than-expected gross sales within the first quarter. Full-price revenues have been up 11.4% within the 13 weeks to 26 April, the agency stated, ensuing from “warmer weather [which] benefited the sale of summer-weight clothing.”

Gross sales beat forecasts in each the UK and abroad, and sailed previous the 6.5% rise that had beforehand been anticipated.

Given its spectacular momentum, the Metropolis’s shiny progress forecasts for Subsequent shares (as proven beneath) are more likely to obtain one other wholesome raise.

Can it maintain impressing?

Can the clothes colossus proceed its scorching streak of forecast beats? Whereas I wouldn’t wager towards it, I do have some reservations.

Regardless of its estimate-bashing first-quarter efficiency, Subsequent has saved projections for the present quarter unchanged. It predicted that “some of the overachievement in Q1 will have pulled forward sales of summer-weight products from Q2.”

Wanting additional out, Subsequent famous too that “we are more cautious” about second-half gross sales as a consequence of sturdy comparatives within the prior 12 months. It added that “the full effects of this April’s National Insurance increases will begin to filter through to the wider economy” later in monetary 2026.

The prospect of additional rate of interest cuts will give shopper spending energy a lift. However the affect could also be restricted because the UK economic system struggles for progress. Knowledge from Which? exhibiting client confidence slumped to its lowest since December 2022 this month underlines the challenges nonetheless going through UK retail.

Ought to I purchase Subsequent shares?

Whereas Subsequent’s latest performances are undoubtedly spectacular, I really feel that the excellent news is now absolutely baked into its share price. At virtually 18 instances, its ahead price-to-earnings (P/E) ratio sits above the height of its five-year common.

I additionally proceed to have reservations concerning the long-term outlook, with Britain going through extended financial weak point and retail competitors intensifying. Whereas it’s buying and selling terrifically properly for the second, I’d relatively discover different UK shares to purchase.