In a preview of the update, Russ Mould, investment director at AJ Bell noted that Next was a stunning performer in 2019, as its shares rose by more than two-thirds to top the £70 mark for the first time in four years, showing “that retailers with the right product at the right price point can thrive, especially if they have a strong multi-channel offering, via physical stores, click and collect and online.”
Next shareholders have also received a 110p-a-share full-year dividend and the proceeds of an ongoing share buyback programme.
The clothing and homewares stores group raised earnings estimates more than once in 2019, with consensus forecasts for the year to January 2020 now for total group sales of £4.3bn versus £4.2 billion a year ago and pre-tax profit of £733mln versus £723mln a year earlier.
Mould noted that more than half of Next’s sales in the year to January 2019 were generated online and analysts will look at the differing growth rates across physical stores and the directory business.
However, one potential snag going forward could be a slowdown in spending for the January sales, with Barclaycard previously reporting that spending in the period will fall by £200mln from a year ago amid growing concerns about the impact of fashion on the environment.
US data the other focus
With the US Federal Reserve appearing to have put interest rate policy on hold following its December meeting after three cuts to take rates down to 1.75% in 2019 some US data will provide pointers for the central bank’s 2020 plans, as will the release of minutes from that Fed meeting, due on Friday.
However, the main focus will likely be on manufacturing data, with both the US manufacturing ISM and PMI readings expected on the final day of the week.
Consumer confidence data on Tuesday showed that Americans were still confident in the economy at the end of 2019, so investors will be seeing if the manufacturing sector is similarly upbeat.
Back in the UK, the construction sector will deliver its first PMI reading of the year, giving some clarity on how 2020 could pan out for the industry.
Significant announcements expected for Friday January 3:
FOMC meeting minutes
Economic data: UK construction PMI; US ISM manufacturing; US manufacturing PMI