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Author: Alan LittleDate: 2021-01-11

ASOS (ASC) up 2% ahead of busy week for UK retail reports

ASOS (ASC) is among the UK retail companies that will report this week, with investors eager to see how sales held up during a COVID-19-impacted festive period.

ASOS (ASC) shares closed 2% higher on Friday ahead of its latest financial report, which will kick off a busy week of updates for fast-fashion outlets, retailers and supermarkets, including Tesco (TSCO) and JD Sports (JD).

Investors will be keeping a close eye on the returns for some of the most popular companies in the UK, as they are expected to include earnings and sales from the Christmas trading period.

However, City broker Peel Hunt noted that festive performance will not have as big an impact on the “sector and share price outlook” compared to previous years.

“The key metrics aren’t so much December like-for-like sales, but rather customer relevance and market positioning,” said Peel Hunt.

Peel Hunt believes that the majority of companies should be able to weather the profit and cash impact of recent store restrictions, due to there being few liquidity concerns.

Investment bank Liberum believes that ASOS, which will report on Wednesday, might struggle to match the growth of its peers due to a less-than-optimal inventory.

Boohoo (BOO) is tipped to shine due to a pandemic boom, though the scandal about underpaid workers could be a downside.

Meanwhile, JD Sports may struggle due to store closures, and investors are waiting to see whether its digital platform has offset at least some of the footfall decline when it reports on Tuesday.

Tesco will also join Morrisons (MRW) and Sainsbury’s (SBRY) in reporting before Friday’s close, and Hargreaves Lansdown said that it is eager to see the extent of the sales spike in Q3.

Supermarkets appear to have enjoyed a strong Christmas, after Morrisons said that sales rose 8% in the final three weeks of the year and Sainsbury’s revealed a 9.3% increase for the nine weeks to Christmas Day.






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