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In today's Taking Stock, we look into how Inditex, parent company of Zara, surges on spring sales rebound. Read this and more market commentary here https://lnkd.in/dNykTSD4 #SasfinWealth2024 #TakingStock

FTSE Down 69.95 Points After Burberry Warns About Profits, US Politics London stocks closed lower on Monday (July 15), weighed down by weaker commodity prices and uncertainty over US politics , while Burberry shares fell to a 14-year low. Meanwhile, the FTSE 100 index on the London Stock Exchange closed at 8,182.96 points, down 69.95 points or -0.85%. The market fell after three straight days of gains, pressured by Burberry shares, which plunged 16% after it warned about profits and changed its CEO. Personal care stocks fell about 12% to their lowest level since June 2010. Industrial metals stocks fell 1.5% after copper prices fell on weak demand outlook in China, which is facing slowing economic growth, weak lending and rising inventories. Political uncertainty in the US has sent global markets into a tailspin following an assassination attempt on President Donald Trump on Saturday. Investors will be eyeing the release of the UK's consumer and producer prices this week ahead of the Bank of England's (BoE) next meeting next month. BoE policymaker Swati Dhingra said the UK inflation outlook was unlikely to rise again rapidly and the BoE should cut interest rates, with investors eyeing a more than 50% chance of a rate cut at its August meeting.

What happened to retail stocks last week? 📈 Leading Stocks: Burberry (13.7%) topped the performance table, driven by improved investor sentiment. Halfords (10.5%) saw a rise in share price despite reporting a slight drop in sales for the six months to 27 September. Investors recognised last year’s strong performance would be challenging to match, with budget concerns and unfavourable weather impacting demand. Boohoo Group PLC (3.5%) gained after Frasers Group called for an emergency shareholder meeting to appoint its founder, Mike Ashley, as CEO. This followed news that Boohoo's current CEO John Lyttle will step down after five years. Inditex (1.6%) rose after expanding its repair and resale platform in the US, supporting its goal of achieving net-zero emissions by 2040. This marks Zara’s first move with this initiative outside Europe. 📉 Trailing stocks: Mothercare PLC (-10.2%) dropped after a 13% decline in worldwide retail sales for FY24, due to weak demand. The company also announced a new financing deal with Reliance Brands to support future growth. Travis Perkins (-7.7%) fell after its new CEO projected a 25% drop in annual profits, noting that the business has been "distracted and overly internally focused." Sosandar (-7.0%) lowered its annual sales forecast, prioritising a return to profitability, with expected revenue of £40 million this year, down from £46.3 million in the 12 months ending March 2024. #RetailStocks #MarketUpdate #StockPerformance #Investing

Seasonally-adjusted world merchandise trade volume rose by 1.1 per cent quarter on quarter and by 3.3 per cent YoY in Q3 2024, marking the fourth consecutive quarter of moderate trade expansion, World Trade Organization said. For the year to September, this was up by 2.4 per cent YoY. Slower trade growth in value terms than in volume terms shows a slight drop in prices of traded goods during the first three quarters. #Fibre2Fashion #f2f #apparel #textile #fashion #textileindustry #f2fnews Read more here: https://lnkd.in/deYtsgS2

Germany's price expectations rose to 17.8 points in July 2024 from 16.1 in June, according to the ifo Institute – Leibniz Institute for Economic Research. The manufacturing sector's price expectations increased to 7.3 points from 6.6. However, consumer-related businesses showed less inclination to raise prices, with retail sector (excluding food) price expectations dropping to 22.7 points from 23.3. #Fibre2Fashion #f2f #apparel #textile #fashion #textileindustry #f2fnews Read more here: https://lnkd.in/djrSh4sU

Germany's price expectations fell to 15.9 points in June from 16.1 in May, as per the ifo Institute – Leibniz Institute for Economic Research Business Survey. The decline is seen in manufacturing and consumer-related sectors, with fewer planned price hikes. Consumer-related businesses' expectations dropped to 22.7 points, and manufacturing to 6.6 points. Non-energy industries hit a low of 6.8 points. #Fibre2Fashion #f2f #apparel #textile #fashion #textileindustry #f2fnews Read more here: https://lnkd.in/dm9J7Fvs

What happened to retail stocks last week? 📈 Leading Stocks: Games Workshop Ltd (13.0%) shares rose after announcing its staff received a total of £18 million in bonuses due to strong sales and profits. In its year-end trading update, it said that sales would be at least £490 million (53 weeks ended 2 June), with pre-tax profits estimated to be at least £200 million. AO (5.7%) increased ahead of its full-year results update this week, with brokers expecting to see a rebound in profits. JD Sports Fashion (4.4%) is being supported by UEFA Euro 2024, which is encouraging consumers to buy football shirts and the latest footwear. However, this boost is only likely to last if England remains in the competition, but their performance has not lived up to expectations so far. 📉 Trailing stocks: Superdry (-12.3%) stock declined, after an initial rise following the approval of its rescue deal, which will see it delist from the London Stock Exchange. Ocado Group (-12.8%) shares dropped on the back of Canadian supermarket Sobeys halting the roll-out of a customer fulfilment centre in Vancouver amid a weaker online grocery market and ending their exclusivity agreement. 🔍 Sector insights: Overall, retail stocks* rose by 1.6% on the previous week. This compares with a c.1.2% rise in the FTSE All share index. *Defined by a weighted basket of 41 food and non-food retailers.

🌍 As global #SupplyChains continue to face disruptions, fashion brands are trying to adapt to both supply and demand challenges. 🏭 On the supply side, ongoing attacks in the Red Sea have caused longer lead times, higher sea freights, and elevated #Inventory levels. Additionally, strong demand from Chinese online retailers keeps air cargo prices high. This makes many fashion companies dependent solely on sea cargo. #Stock levels are also impacted by the risk of the US port workers' possible strike. Furthermore, a 60% import tariff on Chinese goods, if imposed, could deliver another major blow to fashion supply chains. 🚛 On the demand side, with a slowing consumer market, #overstock is a significant challenge for the industry. Brands are cautious with stock levels, focusing on products that align with current market demand to prevent costly markdowns. Long-term strategies need to prioritize building resilient supply chains: diversifying the supplier base, improving #SupplyChainVisibility, and seeking greater efficiency through collaboration with competitors in #logistics. Meanwhile, short-term strategies need to focus on more precise #InventoryManagement to navigate the volatile environment. Planning ahead and staying lean will be essential for success in the next months. More details in the article below by #Vogue Business. 👇

Some retailers in Spain see rise in clothing prices over holiday season Spanish clothing prices are projected to rise up to 5% by February 2025, driven by increased raw material, transport, and environmental compliance costs. Retail executives surveyed by ARTE, including representatives from Inditex, H&M, and Primark, anticipate an average 2.2% price hike during the holiday shopping season,… https://lnkd.in/gkjBjnti https://lnkd.in/gztcsuZn

H&M has abandoned its goal of achieving a 10% operating margin for 2024 due to increased discounting, rising costs, and intense competition, leading to an 8% drop in shares. The company's quarterly operating profit fell short of expectations, with a reported profit of 3.51 billion Swedish crowns, down from 4.74 billion a year ago. H&M anticipates a sales increase of 11% in September compared to the previous year, despite challenges in the market. The operating margin for the first three quarters was 7.4%, with a third-quarter margin of 5.9%, marking a significant decline since the last double-digit margin in 2017. Increased marketing expenditures, including hiring pop star Charli XCX for promotional events, are part of CEO Daniel Erver's strategy to enhance brand visibility and consumer engagement. H&M plans to repurchase shares worth 1 billion Swedish crowns ($98 million) from September 26 to November 26, as its stock performance has lagged behind competitors like Inditex. The company is facing challenges from rivals such as Zara and Shein amid high inflation and weak consumer demand, necessitating tactical discounting to attract price-sensitive shoppers. H&M's inventory levels have risen to 17.8% of rolling 12-month sales, attributed to transport disruptions and proactive buying for the autumn collection, although the long-term inventory goal remains at 12-14% of sales. The earnings report reflects ongoing difficulties under Erver's leadership, contrasting with positive results from competitors like Inditex and Britain's Next. #H&M #apparel #fashion #retail #apparelbrands