Three things you need to know in the financial markets today from investment writer, Tony Cross.
#1. easyJet profit returns for Q3
easyJet LON:EZJ has published a trading update for the quarter ending 30th June. A headline profit of £203m has been posted, reversing the loss seen a year ago, with revenue per seat up by 23% and easyJet holidays contributing £49m, up from the £16m in FY22. Current trends suggest a further improvement in pre-tax profits for Q4 although the company does note the risks associated here with the operational environment and the increasingly crowded skies over the continent. Booking momentum is noted as being sustained into the autumn Q1 FY24 period.
- Three Quick Facts: easyJet, Pets at Home, Mitchells & Butler
- Companies Reporting: easyJet, Halfords, Pets at Home
- Three Quick Facts: Frasers, Dunelm, Barclays
#2. Dunelm profit outlook upgraded
Dunelm LON:DNLM has a Q4 and full year trading update out today, with total sales on both metrics showing a steady 6% increase. Profit is now expected to come in slightly ahead of expectations, which is arguably impressive given consumer uncertainty and inflationary pressures. Despite some aggressive sales – the note adds that over Q4 prices on some 1,000 lines were lowered – gross margin has held steady at 50%.
#3. Howdens: confidence in mid-term outlook
Howdens Joinery LON:HWDN posted half year numbers, noting a modest 1.5% uptick in revenues but a rather more impressive 42% increase from pre-pandemic levels. Gross profit margin has been eroded slightly, down from 61.9% to 61%, but pre-tax profits fell noticeably, down around 23%. The company notes that it continues to gain market share and believes it has an unrivalled in-stock trading model. Challenging conditions do persist at present but the company believes it can continue to generate strong cashflows and will deliver attractive shareholder returns in the medium term.
