Up 33% in a yr! However I feel this high FTSE progress inventory can carry on climbing

I’ve usually thought of shopping for this high FTSE 100 progress inventory solely to withstand as a result of I couldn’t imagine it might maintain its observe document. Because it continues to thrash the market, it’s time for a rethink.

The corporate in query is vogue and life-style chain Subsequent (LSE: NXT). Whereas rival excessive avenue retailers proceed to fall by the wayside, it simply powers on. It has proven there’s nonetheless life in bricks and mortar retail, whereas efficiently exploring recent methods of rising earnings. Buyers can’t get sufficient of it.

Time to purchase this FTSE 100 share?

The Subsequent share value is up 59.47% over 5 years. Over 12 months, it’s up 33.91%. And it’s performed this bang in the course of a cost-of-living disaster, which has made buyers really feel poorer. Wages have scarcely grown in actual phrases because the monetary disaster. But Subsequent powers on.

Final time I seemed on the inventory, on 21 March, its shares had been flying after it posted a 5.9% rise in group gross sales within the yr to January. Revenue earlier than tax rose 5% to a document £918m.

Chairman Michael Roney was upbeat saying that Subsequent had “materially outperformed our preliminary expectations” in an in any other case powerful yr for the financial system. Which is what Subsequent does.

Full-price Q1 gross sales beat forecasts rising 5.7% yr on yr and Subsequent held full-year steerage. Nonetheless, there have been clouds on the horizon, because it warned moist spring climate would hit Q2 gross sales, whereas Q3 and This autumn could be slower too.

Regardless of that, it nonetheless expects annual earnings to develop one other 4.6% to £960m within the yr to January 2025. It’s a bit disappointing however the financial system isn’t out of the woods but, with rate of interest minimize hopes retreating.

It might go greater nonetheless

It doesn’t seem to have nervous Subsequent buyers an excessive amount of, the share value is up one other 3.22% during the last month.

The board’s making the most of weak valuations elsewhere, snapping up retailers Joules and MADE, and taking giant fairness stakes in JoJo Maman Bébé (44%), Reiss (72%) and FatFace (97%). The Whole Platform enterprise provides one other string to its bow, offering the total vary of selling, warehousing and distribution companies to third-party companies.

I’m all the time cautious of shopping for profitable shares for concern of coming late to the celebration. That’s what’s held me again from shopping for Subsequent previously. At the moment, the shares look totally valued, buying and selling at 15.1 instances forecast 2024 earnings.

I didn’t purchase after they had been buying and selling at round 10 or 11 instances earnings, so I really feel a little bit of a sucker shopping for them right this moment. The forecast yield of two.4% is under the FTSE 100 common, however there’s scope for development.

But historical past reveals that it’s dangerous to guess in opposition to Subsequent. 2024 might be bumpy however, with luck, 2025 can be brighter and Subsequent will profit. I’ll purchase it as quickly as I’ve the money.