Happy New Year and welcome back to our end of the week round-up of UK large-cap news. The RNS is still pretty quiet - although Next (LON:NXT) and B&M European Value Retail SA (LON:BME) showed up their peers by proving that it is possible to release a Christmas trading update in the first week of the new year. We’ve also had a useful update from across the pond: Walgreens Boots Alliance (NSQ:WBA) (which owns the eponymous pharmacy chain) has announced a strong set of numbers for its fiscal first quarter against a tough comparison last year.
There are three interesting insights we can gain from these updates which we will dive into in this article:
- Online versus in-store sales - has the former peaked?
- The outlook for the UK economy - this doesn’t feel like a recession
- The outlook for value versus luxury
But first an overview of the announcements themselves.
The Next trading update was its annual masterclass in managing expectations. After a better-than-expected Christmas-trading period (full priced sales up 4.8% in the nine weeks to 30 December), management has increased its full year pre-tax profit guidance to £860m (up 4.5% on last year). Interestingly, that is bang in line with the FY2023 guidance management gave this time last year - as Paul pointed out in his overview of the trading update earlier in the week, the management team at Next has excellent oversight of the business which means they are able to provide a remarkable level of detail on the outlook.
By contrast B&M’s December quarter update was a little light on detail, but similarly strong on the revenue front. In the UK, like-for-like sales were up 6.4% in the December quarter, helping offset weakness in the division earlier in the year. In the financial year to date (B&M’s financial year ends in March), UK revenues are now slightly up on the previous year.
In the US, we’ve had quarterly numbers from Walgreens Boots Alliance (which includes results for its UK retail business). Boots revenue rose 4.3% in the quarter ended December 2022, thanks to high footfall across its flagship retail stores and travel locations.
E-Commerce: Oversold or further to fall?
Online channels were a saving grace for retailers during the Covid years, but in 2022 they provided some tough comparatives.ASOS (LON:ASC) and Boohoo (LON:BOO)…
