LONDON, March 26 (Reuters) – British clothing retailer Next warned the U.S.-Israeli war on Iran will likely impact costs, selling prices and consumer demand as it reported a 14.5% rise in annual profit on Thursday.
The group said the conflict may restrain its growth in the Middle East, which accounts for about 6% of total turnover.
Next said it had accounted for 15 million pounds ($20 million) of additional costs likely to arise from the conflict, such as fuel and air freight, on the assumption that the disruption lasts for three months.
It said these costs have been offset by savings elsewhere, so do not affect its guidance for the new financial year.
“Beyond the next three months, if we see these costs persist, then we will begin to pass costs through as higher pricing – but for today that remains a contingency not a plan,” Next said.
The group edged up its guidance for profit in its 2026/27 year and kept its guidance for sales growth to slow.
It said sales in the first eight weeks of the new year were encouraging in the UK and were also strong overseas up to the point the Middle East conflict began.
($1 = 0.7482 pounds)
(Reporting by James Davey, Editing by Paul Sandle)