FTSE 100 Live Jan 12: Christmas trading boost for JD Sports and Sainsbury’s, US inflation set for 7%

Jay

D Sports Fashion, Dunlam & Sainsbury’s followed Next by upgrading their profit guidance in the wake of Christmas trading today.

Despite supply chain pressures in the festive period, JD said it performed “extremely strong” and supermarket Sainsbury’s reported that it increased market share. Homeware business Dunlam enjoyed a record second quarter, which means profits for the fiscal year will be well ahead of City’s expectations.

Their updates follow last week’s positive updates from Next and follow yesterday’s set statements from Marks & Spencer, Halfords and Tesco.

live update

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Dunlam upgrades benefits guidance

Dunlam remains one of UK retail’s strongest performers with total sales of £407 million for the December 25 quarter, up 13% from a year ago and 26% up from two years ago Is.

Digital sales have doubled in the same period before the pandemic, but store sales have also been “particularly encouraging”.

Dunlam said: “Growth was broad across almost all of our product categories, with very strong performance in furniture reflecting improved availability and expanded range. With our stores fully open, our seasonal range has also performed well.”

Given the strong performance, it now expects to be around £140 million for the first half of its fiscal year, up from £112 million last time and £84 million in 2020.

Unless there is a significant Covid-related disruption, the company said full-year profits “will now be well ahead of market expectations”.

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Retailers excited on busy mornings

It’s a busy morning for Corporate Updates today. Most companies providing trading updates are excited about Christmas, especially in retail businesses. Here’s a selection of the opening headlines:

– Dunlum flags off bumper Christmas and margin improvement. The homewear retailer says online sales are now at double pre-Covid levels and it is investing in new digital partnerships to double the trend. – Vistry – the house builder formed by the merger of Bovis and Galliford Trai – is on track to more than double profits this year as the covid disruptions fade and in 2021 post the property market boom. CEO Greg Fitzgerald lauded the “excellent year” for the homemaker, with “no significant impact to date” from Covid-related absences. It “expects to take a significant step forward in profits and returns in FY22.”

Irish homebuilder Cairns has “substantially advanced” guidance for the year and launched a €75 million buyback after “the strongest ever” six months. Building materials conglomerate Grafton says it is on track to make record profits ahead of market forecasts as inflation leads to bumper sales . Revenue grew nearly 25% to £2.1 billion.

— A day after rival Robert Walters said the same, recruiter Page Group says it has had a record trading period, with a 55% increase in gross profit in the fourth quarter. Its CEO Steve Ingham says: “This is driven by better trading conditions, shorter time to video interviews, investment in new systems, wage inflation, and easier hiring facilitated by improved fee rates as a result of higher demand and short supply of candidates. Full year profit forecasts have been upgraded.

Seville’s profits are set to be “far ahead of the upper end of their previous expectations” after an “extraordinarily strong” end of the year. The demand for warehouse and logistics space has fueled the growth in property agents. It says demand for Prime Residential London properties is “clearly coming back.” — Vimto maker Nichols has warned that the shrinking value of the out-and-about beverage market means it will take an accounting hit in its next set of annual results. Nichols is set to write a goodwill, as sales of the drink “out of the house” are down a third of what they were pre-pandemic.

Sir Martin Sorrell’s S4 Capital has made its first deal of 2022 after averaging one month last year. Operating company Media.Monks is merging with 4 Mile Analytics of California. As usual the exact terms have not been disclosed. S4 says trading remains strong, with business growing faster than the broader market.

Topps Tiles says higher shipping costs are weighing down its margins and reducing employee absenteeism due to Omicron. Despite this, it leaves the forecast unchanged.

– DFS says forecasts remain unchanged after good Christmas.

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Sainsbury’s profits jump on Christmas cheer

Sainsbury’s celebrated a strong Christmas today, as customers treated themselves to party food and champagne.

Online sales doubled compared to the pandemic two years ago, and clothing sales grew 38% on a similar basis in the 16 weeks to January 8.

This allows the grocer to bump up its profit forecast for the year from £60 million to £720 million.

The shares should jump when trading opens at 8 am.

CEO Simon Roberts said: “I’m really pleased with how we delivered to customers this Christmas. More people ate at home and our significant investments in value, innovation and service led to increased market share.”

He added: “The background was challenging.”

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US inflation figure set to reach 7%

Inflation data today is set to show a 7% jump in the US consumer price index for December, up from a 39-year record of 6.8% last month.

Wall Street’s shock is likely to re-ignite on the outlook for a higher-than-expected rate hike of more than 7%.

Federal Reserve Chairman Jerome Powell told the Senate Banking Committee yesterday that the central bank will “use our tools to get inflation back” but acknowledged that price pressure will last well into the middle of this year.

Wall Street currently expects the Federal Reserve to begin raising interest rates in March, with four growth forecasts for 2022.

But there was some assurance in Powell’s testimony that it may still take some time for policymakers to consider the right approach to shrink the Fed’s balance sheet.

It helped calm markets ahead of today’s inflation data as the tech-heavy Nasdaq climbed 1.4% and the S&P 500 rose 0.9%, breaking a sequence of five consecutive declines.

Further stimulus came when China’s inflation rate fell to 1.5% in December, from a 15-month high of 2.3% in the previous month.

As a result, European markets are set to open higher, with the potential for the FTSE 100 index to rise 44 points to 7535 after yesterday’s rise of 46 points.

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