Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
There’s a trading statement out from retailer Next [LON:NXT] this morning covering the third quarter up to October 24th. Numbers are better than expected and forecasts for the full year are being hiked, too. On the central sales target, profit expectations of £365m are now being seen, up more than 20% from figures given last month. This accounts for further local lockdowns with capacity constraints reducing physical sales in the run up to Christmas. The company also notes it is well prepared for Brexit and although new tariffs will increase costs, these can likely be offset through re-sourcing with suppliers.
House brick manufacturer Ibstock [LON:IBST] also has a trading update out today. September saw sales at 90% of 2019 levels, a figure which has been maintained through October. Margins are also improving, although the fact sales remain depressed may be a surprise to some given the rebound reported by housebuilders themselves. The company notes that whilst it is encouraged by the recovery in Q3 demand, uncertainty still lies ahead.
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Back to retail and Shoe Zone [LON:SHOE] have published a full year trading. Since reopening in June, store sales have been down 20% whilst online sales have been up 100% from 2019 levels. Full year revenues are off by around a quarter, but despite this there’s confidence that sufficient funding is available to ensure the future survival of the business. It will look fundamentally different however with the company set to close 10% of its stores next April and up to a further 10% in the following 12 months. This highlights the unsustainability of the current rates model, not just for Shoe Zone but for many other businesses, too.
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