Tesco was down, although fledgling US business Fresh & Easy has impressed visiting analysts. Citi noted: “The eventual aim is that no one should be more than a mile from a Fresh & Easy. A store density of this magnitude lends weight to the possibility of an ultimate network of 10,000 stores across the US.”
The fall in electricals group DSGi’s first-half profits from£70.3 million to£52.4 million had been anticipated by the City, but still disappointed. New chief executive John Browett starts next week, but Pali International forecast little upside before Christmas and recommended switching to rival Kesa.
Last week, Kesa posted a 3 per cent rise in third-quarter group like-for-likes, although France outperformed the UK, where the Comet chain was down 0.2 per cent. Landsbanki stuck to its reduce stance and said: “Selling high-priced manufacturers’ brands will get progressively more difficult as internet penetration grows over the next few years.”
Jeweller Signet lost its lustre after issuing a profit warning on Tuesday. Since the end of the third quarter, comparable store sales in the key US market – where Signet does two thirds of its business – have fallen 7 per cent in November. Deutsche Bank rated Signet a hold, but cut its target price from 93p to 80p.
Department store group Debenhams’ management met Kaupthing, providing some reassurance on debt and trading. The broker, advising buy, said: “Management continue to relay messages that are at odds with market speculation, although the truth is that conditions are extremely volatile from one week to the next.” Kaupthing was bullish on the back of market share gains and strategic focus on price, quality, design and merchandising.
Sports Direct warned on profits after England failed to qualify for Euro 2008. The retailer will also seek permission to buy back more shares.
Motor accessories retailer Halfords reported a 16.4 per cent uplift in interim profits to£47.6 million. Like-for-likes rose 5.5 per cent during the period. Accumulate, recommended Charles Stanley.
First-half profits at Mothercare rose 10.7 per cent to£13.4 million, excluding losses at Early Learning Centre, which it acquired in May. Chief executive Ben Gordon hailed a “transformational first half”. Buy, advised Kaupthing.
Investec and Shore capital both issued bearish notes on the outlook for general retailers. Each expects a tightening of consumer spending next year. Marks & Spencer and Ted Baker were Investec’s top picks, while M&S, Game and N Brown were among Shore’s likely Christmas winners.
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