UK retailers signal more gloom as Asos, DFS and Dunelm deliver disappointing trading reports
Corporations reported extra gloom on the UK retail entrance on Thursday, with couch vendor DFS issuing a revenue warning and comfortable furnishings agency Dunelm saying a drop in gross sales.
In the meantime, style enterprise Asos stated on Thursday that it expects gross sales for 2018 to fall on the decrease finish of a predicted progress vary of 25-30 per cent. Shares within the on-line retailer fell 11 per cent in early buying and selling.
“This doesn’t imply Asos has all of a sudden grow to be a nasty or disappointing firm,” stated Russ Mould, AJ Bell funding director. As a substitute, he stated, it signifies how a lot emphasis Asos traders place on future earnings estimates.
Asos vows to ban feathers, mohair, silk and cashmere from web site
DFS’s inventory dropped 10 per cent at one stage in early buying and selling, after the corporate revealed it expects to report earnings for the complete monetary yr under the determine recorded for final yr.
DFS stated in a buying and selling replace for the second half that this was as a result of “considerably decrease than anticipated order consumption” due to the “exceptionally scorching climate” all through the fourth quarter, which additionally affected key buying and selling weekends.
The corporate additionally stated it had “skilled disruption exterior of our management to ships bringing made-to-order merchandise from the Far East”.
Traders appeared to disregard recommendation from analysts at Peel Hunt, who stated: “Don’t panic The climate, England’s World Cup run and points at Felixstowe have mixed to create a tough set of buying and selling situations for dwelling/large ticket retailers, and DFS isn’t immune.
“If DFS has a chilly, we’d think about that the competitors are in retail hospital. DFS is in an enviable, market-leading place, tapping into a large demographic and addressing the net problem as nicely.”
DFS stated that it expects the retail market to stay difficult for the following yr “given ongoing decreased client confidence ranges”, however added that there must be some alleviation of present short-term demand constraints.
Dunelm reported flat like-for-like revenues within the 13 weeks to 30 June, with gross sales in retailers falling four.6 per cent in the identical interval as a result of “disappointing” footfall.
The agency has put aside an additional £3m to offer for losses based mostly on gross sales of merchandise at clearance costs.
Shares within the firm fell 1.5 per cent and are at the moment hovering at a five-year low.
Nick Wilkinson, Dunelm’s chief government, stated: “I firmly imagine that our homewares authority, mixed with our growing means to adapt to evolving client traits, means that there’s very important potential for progress of the Dunelm model.”
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