FTSE 100 Live: Retail Sales After Surprising Drop, Confidence Falls

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Netflix shares soar, FTSE 100 seen higher

Netflix shares rose 7% in after-hours trading last night after the streaming service more than beat Wall Street expectations with the addition of 7.7 million customers in the fourth quarter.

Reported operating profit of $550 million (£445 million) was more than $200 million (£162 million) better than expected, reflecting better sales and slower-than-expected hiring. Underlying operating margins were 20%, at the high end of the target range.

Hargreaves Lansdown analyst Sophie Lund-Yates said: “Netflix has had a great end to the year, with a performance that even the worst critics can’t argue with.

“As Wall Street collapses under the weight of recession fears and the jitters of the Federal Reserve, Netflix’s massive surge in subscriber numbers has injected much-needed optimism into the mix. The subscriber growth is the result of a combination of acquisition and retention, which is incredibly important.”

U.S. markets fell Thursday on signs of slowing consumer demand and the threat of interest rates staying high longer.

The Netflix boost should mean a more resilient session later on, while CMC Markets expects the FTSE 100 index to recover 38 points to 7785 after yesterday’s 1% drop.

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Christmas shoppers stay late at The Works as the mail strikes hit online sales

Discount book, toy and craft retailer The Works said Christmas shoppers left it late last year, but showed up the week before the big day to see sales across its 500 stores jump nearly 10% in the 11 weeks to January 15.

But online sales fell 14% during that period and it said they remained “disappointing”. It said customers were “losing confidence in retailers’ delivery promises in the face of widespread postal strikes and potential knock-on effects on other carriers.

The mainstay of London’s high streets from Camden to Woolwich also said retail sales remained strong in January, with levels of discounted inventories expected to rise after last year’s lows.

But it reported a loss of nearly £11 million for the first half of its financial year, compared to a loss of £1 million a year earlier. although it pointed out that its business is seasonal, with profits mainly coming from the second half and the holiday season.

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The Birmingham-based company’s range of games, stationery and novelties makes it a family favorite for stocking fillers and gift shopping. It warned in August that inflation and the rising cost of living meant Christmas trading would mean sales growth over the period would be uncertain.

CEO Gavin Peck said today, “While the trading environment remains uncertain, we are encouraged by the strength of our performance during and after the important Christmas period.”

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Retail sales fall, confidence near record low

Retail sales volumes fell 1% in December after forecasts to reverse the 0.5% fall in November.

Food sales were hit hard as shoppers cut back on rising prices, while online retailers suffered from the impact of the Royal Mail industrial action.

Spending in December was up 3.8% year-on-year, but an inflation rate of more than 10% meant that shoppers were getting much less value for money as volumes fell 5.8% compared to from a year earlier.

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With rising utility bills and inflation continuing to gobble up wage increases, GfK said consumer confidence fell to minus 45 in January. That’s near a record low and defied expectations for a slight improvement.

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4imprint crushes earnings estimates as sales soar 45%

Promotional product maker 4imprint appears to be going from strength to strength, with profits exceeding previous estimates.

The maker of branded mugs, wristbands and key chains hailed a “particularly strong finish to the year”, with sales up 45% to $1.14 billion (£0.92 billion).

The company’s pre-tax earnings are expected to come in above the high end of estimates, to exceed $100 million.

4imprint said: “The board of directors is pleased with the group’s progress in 2022, which reflects the clarity of the strategy, the flexibility and resilience of the business model and the outstanding commitment of the team. The Group is entering 2023 optimistically.”

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