There was no white Christmas for most of us in the UK this year.
But we're guaranteed a January blizzard – a storm of Christmas trading updates from FTSE retailers.
Plenty of big names will report on how they fared in which variety of product chain B&M European Retail Value called 'the Golden Quarter'.
As always, we can expect that Christmas trading has boosted some companies' confidence in their full-year forecasts. And some to lower or raise your expectations.
Let's take a look at what awaits us.
Selection box
The table below shows just a selection of the many retailers due to issue trading statements in January.
It includes the expected dates for your announcements and the performance of your actions over the last 12 months.
Given the FTSE 100 up just 3.8% in 2023, and midcap FTSE 250 Only slightly higher at 4.4%, it's no exaggeration to say that most retail stocks absolutely swept the market.
In demand
FTSE food retailer shares performed well across the board. And I also note that the private discount supermarket chains Aldi and Lidl have already reported (January 2) to the media that they had their “best” Christmas ever.
Value-focused FTSE retail shares were popular with investors through 2023. Primark owner Associated British foods (+51%) and B&M (+43%) were notable big risers.
And despite the much-vaunted “cost of living crisis,” investors also piled money into mid-market retailers. Marks and Spencer (+121%) had an outstanding performance, and Next (+40%) was another that attracted strong support.
Out of favor
Investor enthusiasm for retail stocks did not extend to sellers of more expensive items and luxury goods.
curry, The emporium of computers, televisions and kitchen appliances was one of two companies in the table above whose shares fell last year. They fell 6%.
dfs furniture, Another higher-priced home goods seller, which is also likely to issue a trading update in mid-January (it has not confirmed a date), has seen its shares fall 21% in 2023.
luxury fashion house Burberry (-30%) was another decline. It issued a profit warning in November, citing a “slowdown in global luxury demand.”
Similarly, investors shunned high-end jewelry and watch retailers. Swiss watches (-14%). This one has a commercial update scheduled for early February.
Common headwinds
Despite positive investor sentiment toward grocery, value and mid-market retail stocks on the one hand, and negative sentiment toward higher value and luxury retailers on the other, there are many common headwinds across the sector. retail.
In early November, B&M noted that “An uncertain and constantly changing economic context makes forecasts for the entire year difficult.”
And M&S detailed a number of factors at play that are outside retailers' control. Namely: “Consumer impact of the highest interest rates in 20 years, deflation, geopolitical events and erratic weather.”
Hyperactivity
With greater potential for Christmas stories about the unexpected (positive or negative) in the flurry of January updates, it seems there may be more scope than usual for hyperbolic headline writers and excitable media commentators to ply their trades.
I have no doubt that there will be big rises or falls in the stock prices of at least some retailers on their update days. And that short-term traders will revel in their “experience” when they bet on stocks that rise and curse their “bad luck” on those that fall.
Foolish investors
None of January's retail hoopla should be of much concern to sensible and foolish long-term investors.
If you already own shares in a retailer or are thinking about investing in one, your holiday update may provide you with new information or useful information. But in the grand scheme of things, it's just one more small step (forward or backward) in the company's journey.
A short trading period alone will not define the long-term future of the business or the success (or failure) of your investment.
