Here are three things you need to know in the financial markets this morning from investment writer, Tony Cross.
#1. Next’s bumper festive sales yield special dividend
This morning sees the first of the post-Christmas trading updates from retailers, with Next [LON:NXT] leading the pack. In the eight weeks to December 25th, the company reports full price sales up 20% from the 2019 figure, some £70m ahead of previous guidance and this has resulted in management increasing profit guidance as a result. Investors are to be rewarded with a special dividend of 160p and the intention is to return to the pre-pandemic cycle for dividends, too. This all comes despite the company accounting for some significant cost pressures as a result of shipping costs, although rising taxes and broader inflationary implications for consumers, along with the ability to spend on a wider range of discretionary goods and services like overseas holidays could serve to weigh a little on positivity here.
#2. Best ever Christmas sees earnings forecast increase at B&M
B&M European Value Retail [LON:BME] has issued figures for the 13 weeks to December 25th today. Some detail is lacking here but UK sales are up 14% from pre-pandemic levels, expansion of the estate continues at a steady pace and France is performing especially well with Q3 revenues adding 30%. Despite the pandemic creating challenges for retailers and consumers alike, this was the company’s best-ever Christmas and FY EBITDA forecasts have been upped to exceed £600m against a current consensus estimate of £578m. Underlining the battle for employees, staff are to be rewarded with an extra week’s pay this month.
#3. On a roll – Greggs pushes past pre-pandemic sales levels.
Greggs [LON:GRG] has this morning issued a Q4 trading update, announcing that revenues have pushed past pre-pandemic levels with sales growth of 5.3% from 2019 and a total of 2181 shops now operating. Full year outcomes are expected to be slightly ahead of previous forecasts and that’s despite the company having contended with supply chain and staffing issues through the quarter. The company is well funded and plans further store expansion as a result, along with noting an intention to make an additional payout to shareholders of £30-£40m this year. Staff are being rewarded with the company bringing forward pay awards by five months.