Sportswear giant sees £1.7bn wiped off market value following "more cautious consumer spending" and mild autumn weather
Sportswear retailer JD Sports suffered a significant blow yesterday as its shares plummeted by 23% following a surprise profit warning. The UK-based company, which has been a strong presence in the retail industry, lost almost £1.7 billion in market value as shares dropped to 119.7p. JD Sports attributed the decline to "more cautious consumer spending" and the impact of mild autumn weather on demand. Despite a 6% increase in total sales, like-for-like sales rose by just 1.8% in the 22 weeks leading up to December 30. The company now expects profits to be 10% lower than previous guidance, ranging between £915 million and £935 million.
Next raises profit forecasts and rules out price hikes
Next, the fashion chain that also owns brands such as Joules, FatFace, and Reiss, provided a boost to investors and shoppers by raising profit forecasts and assuring no price hikes. The company stated that there would be "zero inflation" in its shops this year due to a substantial decrease in factory costs. Next CEO Lord Wolfson claimed that falling prices would have benefited shoppers if the government had not increased the living wage, resulting in higher staffing costs. He also mentioned that the company would experience stable input prices for the first time in three years after facing significant cost pressures during the pandemic and energy crisis. Next now anticipates making profits of £905 million, £20 million more than previously expected.
Shortage of public charging points hampers electric car adoption
Car industry leaders have expressed concerns that a lack of public charging points in the North of the UK is hindering the transition to electric vehicles. The Society of Motor Manufacturers and Traders (SMMT) reported that 1.9 million new cars were registered last year, an 18% increase from the previous year. However, the number of battery electric vehicles reached a record high, indicating more businesses adopting electric van fleets. The SMMT called on the government to reduce VAT on electric vehicles by 50% for three years to encourage more drivers to make the switch. They also stressed the need for a national rollout of charging infrastructure.
Boots owner considers potential stock listing
Walgreens Boots Alliance, the owner of Boots, has revealed that it is exploring a potential £7 billion flotation of the beauty and health firm. The company experienced a 9.8% increase in sales in the run-up to Christmas, with record Black Friday sales contributing to the positive performance. Walgreens Boots Alliance aims to focus on the US market and is evaluating all strategic options for Boots. CEO Tim Wentworth stated that "everything's on the table."
BAE signs £39 million contract with US Army
British defense firm BAE has secured a £39 million contract with the US Army to resume production of its M777 guns. The decision was influenced by the effective use of the towed howitzers by Ukraine against Russia. Initially, the contract will focus on producing parts to refurbish guns used by Ukrainian forces, which were donated by Western allies. BAE emphasized its pride in supporting allies during critical times and expressed confidence in the performance of the howitzers deployed in Ukraine.
Sainsbury's increases pay for 120,000 staff
Sainsbury's, the UK supermarket chain, announced a pay rise of £2,000 per year for 120,000 employees. Starting from March, workers will receive £12 per hour (£13.15 in London), representing a 9% increase. The pay rise will cost the supermarket £200 million.
Bank of England rate cut hopes lead to cheaper mortgages
The possibility of a Bank of England interest rate cut in the spring is prompting a decrease in mortgage rates. The number of home loan approvals increased in November, indicating a potential housing market rally. Economists predict that inflation could fall to 2% by May, which has led to speculation that the Bank will begin reducing rates. This growing confidence has sparked a price war among lenders, resulting in lower mortgage rates. NatWest, for example, lowered its two-year fixed rate to 4.81%. Homeowners remortgaging may still pay around £200 more than they did in 2021.
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