Winners
M&S (LON:MKS)
For the first time in several years, investors welcomed the news of a successful Christmas for high street chain Marks and Spencer.
Sales in its clothing and home department rose 2.3 percent like-for-like, well above analyst expectations of a 0.5 percent increase. Total sales for the UK rose 1.3 percent on a like-for-like basis, with its food division again proving popular, rising 0.6 percent in the 13 weeks to the 31st December 2016.
Marks and Spencer clothing sales have been in decline for the past five years, and have been the subject of concern for both investors and analysts. The group appointed a new CEO last year, Steve Rowe, who has implemented a turnaround plan which appears to be beginning to pay off.
Asos (LON:ASC)
Shares in Asos rose over 5 percent after revealng sales had jumped 27 percent in the six weeks to January 9th. Retail sales for the group rose 15 percent over the Christmas quarter, almost double the 8 percent growth seen in the three months to November.
Its international business was also boosted by the fall in the price of sterling, with international sales rising 52 percent to £361.7 million in the four months to the end of December.
CEO Nick Robertson confirmed on Friday that “guidance for the outcome for the year in terms of both sales and EBIT margin remains unchanged.”
The results will go some way to alleviate concerns from investors after the Asos warehouse in Barnsley was hit by a serious fire last year.
British supermarkets
Despite having several troubled years, as bigger chains struggle to compete with discount stores and rising inflation, it seems the British supermarket sector is back on track.
Despite only an incremental growth in sales, Sainsbury’s (LON:SBRY) delivered good news to investors with its strongest Christmas ever and its first growth in sales since March. It was aided by strong results from electrical chain Argos, which it took over last year despite investor scepticism.
Rival German supermarkets Aldi and Lidl both had a bumper Christmas season, with 15 percent and 10 percent respectively.
Tesco (LON:TSCO) also came in above analysts expectations, with a 0.7 percent rise in sales over the Christmas period. Despite shares falling on a disappointing performance internationally, strong UK demand saw party food sales rise 24 percent, premium wine up 20 percent, and Free From specialist allergy-free foods rose 18 percent.
Perhaps the strongest result in the sector came from struggling supermarket Morrisons (LON:MRW), which experienced its best Christmas in seven years. CEO David Potts reported a 2.9 percent increase in like-for-like sales excluding fuel after opening more tills and cutting fewer prices.
Losers
Next (LON:NXT)
Earnings season in the retail sector got off to a bad start on January 4th, as Next became the first to report its Christmas results. Its share price slumped by more than 14 percent as investors were yet again disappointed by poor sales.
Sales down 7 percent in its famous Boxing Day sale, which traditionally sees shoppers queue up from 5am.
full-price sales fell by 0.4 percent in the 54 days to 24 December, with annual profits now set to be at the low end of expectations.
The firm forecast full-year profits would be £792 million, compared with previous guidance of £785m-£825 million. Next is already predicting a fall in profits for next year, saying it expects to make between £680 million and £780 million.
Its chief executive, Simon Wolfson, attributed the fall to a lack of demand, as consumer spending shifts towards leisure activities: “Clothing has had a good run. It had a soft landing during the credit crunch when things like car sales were hit harder but now there is a shift away from clothing to more experiential based spending like eating out, holidays and visitor attractions.”
Next was one of the only retail giants to report a bad Christmas in 2016, with strong sales lifting the shares of almost all reporting.
Dunelm’s (LON:DNLM) report was relatively weak, seeing just a 0.2 per cent growth in like-for-like sales in the 13 weeks to December 31 and sending shares 1.4 percent lower. However, the lower figures were offset by a 21.7 per cent increase in home delivery sales for the quarter.