Post-Christmas Retail Review: The Good, the Average and the Ugly

We’ve now had a chance to look at trading updates from all the major UK retailers after the peak Christmas trading season.

In this article, I’m going to quickly review them, even those which aren’t particularly seasonal, and hopefully put them into categories!

(Disclosure: at the time of publication, I have long positions in NXT and BRBY; my co-writers Roland and Mark may have positions in other shares mentioned.)

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The Good

Next (LON:NXT) (Disclosure: I’m long NXT.)

• Reporting date: 6th January.

• Sector: clothing, footwear, home products

• Full-price sales +10.6%

• Ahead of expectations

Our view: This was a typical Next update: clear, transparent, timely and ahead of expectations. Nothing to dislike. We stayed AMBER/GREEN.

Tesco (LON:TSCO)

• Reporting date: 8th January

• Sector: groceries and general merchandise

• Like-for-like Christmas sales +2.4%

• Full-year adj. operating profit at upper end of guidance.

Our view: The market didn’t like this “ahead” update, marking the shares down by 6% on the day, as investors apparently expected even better from this retail giant. With the company having arguably superior economics against its competitors, we stayed AMBER/GREEN.

Currys (LON:CURY)

• Reporting date: 21st January

• Sector: technology

• LfL revenue +6% during peak season, +4% for H1.

• Adj pre-tax profit to be £180 to 190m, ahead of consensus expectations of £180m.

Our view: We were positive on this through 2025 and it continues to repay this stance with resilient trading. I’ve been very grateful for management’s transparency, and reassured by their policy of keeping £100m+ of net cash on the balance sheet. The cost headwinds it has faced over the past year make its results doubly impressive in my book.

The Average

Topps Tiles (LON:TPT)

• Reporting date: 7th January.

• Sector: tiles (bathroom, kitchen, floors, walls)

• Q1 like-for-like revenue +3.7%

• Forecasts unchanged

Our view: There was nothing wrong with this update, and we stayed AMBER/GREEN.

Marks and Spencer (LON:MKS)

• Reporting date: 8th January

• Sector: clothing, beauty, home and food.

• LfL food +5.6%, fashion/home/beauty minus 2.9%

• Guidance unchanged

Our view: We stayed neutral, noting that unchanged guidance still means a 20% fall in EPS. Forecasts out to 2027 look very interesting, but there’s much to be done between now and then.

Greggs (LON:GRG)

• Reporting date: 8th January

• Sector: bakery

• Q4 LfL sales +2.9%, full-year like-for-like sales +2.4%.

• Full-year outcome in line with guidance.

Our view: Mark noted that food inflation was 3.3% year-on-year in December, important context for these like-for-like sales figures. EPS is expected to have fallen 14% in 2025. We stayed neutral.

J Sainsbury (LON:SBRY)

• Reporting date: 9th January

• Sector: groceries

• Q3 LfL sales +3.4%, groceries +5.4%.

• Earnings forecasts unchanged, but 10% improvement in free cash flow.

Our view: Roland also noted that reported inflation makes grocery growth figures less impressive, and described the valuation as potentially being “up with events”. SBRY trades on 12x earnings and we are AMBER/GREEN.

Mulberry (LON:MUL)

• Reporting date: 14th January

• Sector: luxury

• Q3 sales +5.3%, retail and digital LfL sales +11%.

• Management described the festive period as “a strong performance”.

Our view: This was a nice update with strong LfL figures and confident statements by management. However, the raw P&L figures have been poor and are expected to remain so, according to forecasts in the market, for the foreseeable future. We stayed AMBER/RED.

Dunelm (LON:DNLM)

• Reporting date: 15th January

• Sector: home furnishings

• Total sales +1.6% (Q2), +3.6% (H1).

• FY26 PBT now expected to be at the lower end of consensus expectations (£214 - 227m).

Our view: This was a minor profit warning with PBT expectations only falling by a few percentage points. We stayed neutral.

Burberry (LON:BRBY) (Disclosure: I’m long BRBY.)

• Reporting date: 21st January

• Sector: luxury (global)

• Q3 revenue +1%, comparable store sales +3%.

• FY26 adj operating profit to be in line with consensus of £149m.

Our view: We stayed neutral on this. I’m delighted to see the company generating comparable sales growth and keeping its forecasts unchanged: if it hits forecasts, we should see profits rebound sharply higher over the next couple of years. But as the share price already expects this to happen, I personally can’t justify a more bullish stance on the shares at this time.

The Ugly

Associated British Foods (LON:ABF)

• Reporting date: 8th January

• Sector: food processing and retailing (includes Primark)

• Like-for-like sales growth of 1% at Primark (16 weeks to 3rd January).

• Primark’s sales were below expectations; now expecting H1 sales growth in the low single digits.

Our view: We didn’t view this as a major profit warning, as the EPS forecast only seemed to move by a few percentage points. However, the market took a dim view and marked the shares down by as much as 12%. Consistent with our methodology, we downgraded from neutral to AMBER/RED.

Shoe Zone (LON:SHOE)

• Reporting date: 13th January

• Sector: footwear

• Conditions in 2026 remain “challenging”.

• Lowered the PBT estimate for FY26 to £1m (previous £4m at brokers).

Our view: Not the first profit warning here in recent memory. We were already AMBER/RED and we downgraded further to fully RED. Could be interesting in a recovery (market cap only £25m now), and management are conserving cash well, but it could be a painful wait for shareholders.

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Conclusion

So there you have it, a quick post-Christmas retail review.

We had three “Good” updates, 7 “Average” ones, and only 2 “Ugly” ones (admittedly, one of the “Average” results was a minor profit warning!).

As for the conclusion, I think it’s clear that Christmas was not a disaster for the consumer or for investors in the sector. But neither did it prove that the UK consumer has returned to strength. In general, LfL sales growth was in the low single digits, not far off inflation.

So I don’t think macro conditions had all that great of an effect: companies that were already performing well, for the most part, continued to perform well. Companies that were already struggling, continued to struggle. That makes a good environment for stock-pickers, I guess! I hope you’ve enjoyed this brief review.