Small beat, but +20% on a 1% increase in PBT guidance since the bottom and +12% today. I understand the positives of the buyback and trading being better. Decent SI has also helped the rally today.

They had a relevance problem, which they have cleaned up, that is what they are in control of.

HOWEVER they also said trading has been better because of the weather, which is not in their control.

They are also not in control of what is to come for the UK consumer and we are seeing genuine inflation, and no wage growth that will not end well.

NEXT quote: “I’ve noted market has reacted with exuberance to a small change in numbers and outlook. We are still in tough times and the outlook is still challenging, even if less so than before”

I will be adding to the short here. I didn’t get any sell orders of the back of the idea so here is your chance to short them!



Wednesday • 13th September 2017 • 10:05

Now back to the post earnings highs, where the lower end of sales guidance was taken up slightly on the back of good weather in june and july. Weather since then has been awful.

Profit commentary will be the focus. Given the cash flow uptick with Q2 the market is likely expecting a profit uptick. However, since Q2 we have had numbers fom ABF where Primark is clearly taking share, and inflation data that suggests the consumer is getting squeezed further. As a result, ahead of the uncertain and key Xmas trading period, we feel that uptick is unlikely to come. Instead we think cautious commentary is more likely, putting into question the recent bounce. TRADING SELL.