Halfords Share News (HFD)

LONDON (Alliance News) - Stock prices in London are set to ease back early Thursday following several sessions of US-China trade talk-inspired gains.In a jam-packed day of trading updates from UK retailers, Tesco reported growth in Christmas sales, while Marks & Spencer said it performed steadily over the festive period despite sales falling. Halfords lowered its profit guidance, while Card Factory braced for a difficult year ahead.IG says futures indicate the FTSE 100 index of large-caps to open 19.33 points lower at 6,887.30 on Thursday. The FTSE 100 index closed up 45.03 points, or 0.7%, at 6,906.63 on Wednesday.After extending discussions into a third day on Wednesday, US and Chinese trade teams made some progress but questions remain over how they will overcome differences which have been fuelling an ongoing trade war.US officials called for any future agreement with their Chinese counterparts to be subject "to ongoing verification and effective enforcement," according to a statement released Thursday by the US trade representative. The demand reflects older complaints China doesn't always fulfil its trade-related promises."If you asked me on Monday if I expected a significant outcome from this meeting with Trump not holding court, I would have said absolutely not but unquestionably markets were looking for something more concrete to sink their teeth into despite the statement chock-full of positives but lacking in the necessary specificity," said Stephen Innes, head of APAC trading at Oanda.A weaker dollar is also likely to hinder London's overseas-earnings heavy blue-chip index.Sterling was quoted at USD1.2776 early Thursday, higher compared to USD1.2740 at the London equities close on Wednesday.The greenback softened after minutes from the Federal Open Market Committee's latest meeting confirmed Federal Reserve Chair Jerome Powell's recent remarks suggesting the central bank will take a patient approach to further interest rate increases.The Fed decided to raise rates by a quarter point at the meeting, but the minutes suggest volatility in financial markets and increased concerns about global economic growth have clouded the outlook for rates."Against this backdrop, many participants expressed the view that, especially in an environment of muted inflation pressures, the Committee could afford to be patient about further policy firming," the minutes said.In UK company news, grocer Tesco reported sales growth over the festive period, driven by the UK & Ireland.Like-for-like sales in the Christmas period, or six weeks to January 5, were up 1.5%. This was driven by the UK & Ireland, with sales up 2.6% while Central Europe was down 2.4% and Asia down 2.8%.Within UK & Ireland, Tesco UK sales were up 2.2%, Ireland sales up 0.3% and wholesaler Booker reported like-for-like sales growth of 6.7%. "In the UK we delivered significant improvements in our competitive offer and this is reflected in a very strong Christmas performance which was ahead of the market," commented Chief Executive Dave Lewis. In the third quarter, 13 weeks to November 24, like-for-like sales were up 0.5%. In the 19 weeks to November 24, Tesco group comparable sales were up 0.8%.Marks & Spencer said it produced a "steady performance" in a difficult market, as sales fell over the key Christmas trading period. Total sales were down 3.9% to GBP3.0 billion in the 13 weeks to December 29, with total UK sales down 2.7%. On a like-for-like basis, UK sales were down 2.2%, comprising a 2.1% fall in food sales and a 2.4% in clothing & home. "The combination of reducing consumer confidence, mild weather, Black Friday, and widespread discounting by our competitors made November a very challenging trading period. However, overall our 13-week performance was steady with some early encouraging signs," said Chief Executive Steve Rowe.Bike and car parts seller Halfords said revenue fell in its third quarter due to mild weather and weak consumer confidence, leading the company to cut its annual profit guidance.In the 14 weeks to January 4 - covering the Christmas trading period - sales were down 2.0%, with Retail sales down 2.5% and a 1.9% rise in Autocentres unable to offset this. On a like-for-like basis, group sales fell 1.7% in the period. Halfords said it now expects underlying pretax profit for its current financial year to be in the range of GBP58 million to GBP62 million and, further, said it expects profit for the year after to be "broadly flat" on this revised guidance on the possibility that consumer confidence remains weak. In November, Halfords said it expected profit for its 2019 financial year to be broadly flat on the GBP71.6 million achieved for the 2018 year. The company emphasised that its cash flow and "positive longer-term prospects" given the company confidence in maintaining its dividend policy. "This has been a challenging third quarter for the business, driven by exceptionally mild weather and ongoing weak consumer confidence. Together, these factors have led us to reduce our profit expectations. Whilst this has been a difficult period, we have managed costs and margin well and our free cash flow remains strong," said Chief Executive Graham Stapleton.Card Factory said it delivered a "creditable" performance in the festive period, driven largely by its new store rollout as like-for-like trading was soft.For the eleven months to the end of December, sales were up 3.4% while like-for-like sales were down 0.1%. In the same period a year ago, like-for-like sales were up 3.0%. The cards retailer said it expects the 2020 financial year will be another difficult one "in light of the current consumer and macro-economic backdrop", with earnings before interest, taxes, depreciation and amortisation to be broadly flat, based on limited sales growth.B&M European Value Retail reported sales growth for its third quarter, though comparable UK sales were down against a tough comparative the year before.Sales grew 12% in the 13 weeks to December 29 at constant currency, with B&M UK like-for-like sales down 1.6% against a "strong" prior year comparable of 3.9% growth. The retailer said December's positive trading momentum has continued into early January, with the company believing it is "well positioned" for the remainder of its financial year. Department store Debenhams said it remains on track to deliver annual profit in line with market expectations against a "challenging" backdrop. Gross transaction value for the 6 weeks to January 5 fell 3.8%, with like-for-like sales down 3.4%. For the 18 weeks to January 5, like-for-like sales were down 5.7%. The struggling chain said it chose to partake in "tactical promotional activity" in order to remain competitive, which is expected to result in some gross margin erosion for the first half. The company also said that in light of the requirement to refinance existing bank facilities within the next 12 months, "constructive" discussions have commenced with lenders. Debenhams has put any further asset disposals on hold until the outcome of the discussions is know. Ahead of the host of updates from UK retailers, the latest British Retail Consortium-KPMG Retail Sales Monitor showed UK shopkeepers had the worst Christmas in a decade as sales registered no growth in December.Total sales were flat in the five weeks to December 29 compared to a year before, versus a 1.4% rise in the same period a year ago. This was the lowest growth rate since April, and was below the 3-month and 12-month averages of 0.5% and 1.2%, respectively.This also marked the worst December sales performance since 2008."Squeezed consumers chose not to splash out this Christmas with retail sales growth stalling for the first time in 28 months. The worst December sales performance in ten years means a challenging start to 2019 for retailers, with business rates set to rise once again this year, and the threat of a no-deal Brexit looming ever larger," said Helen Dickinson, chief executive of the BRC.Like-for-like UK retail sales fell 0.7% year-on-year in December, compared to a 0.6% rise in December 2017.In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average ending up 0.4%, the S&P 500 also up 0.4%, and the Nasdaq Composite closing 0.9% higher.In Asia on Thursday, the Japanese Nikkei 225 index ended down 1.3%. In China, the Shanghai Composite closed down 0.4%, while the Hang Seng index in Hong Kong is flat.Official data showed China's consumer price index, a main gauge of inflation, slowed in December, rising 1.9% year-on-year. In November, CPI had grown 2.2%. China's producer price index, which reflects the costs of goods at the factory gate, rose 0.9% year-on-year in December, down from 2.7% in November.To come in the economic events calendar on Thursday is the Bank of England's credit conditions survey at 0930 GMT. In addition Federal Reserve Chair Jerome Powell will speak at the Economic Club of Washington at 1700 GMT.