Earlier today I looked at UK Index companies reporting results or trading updates next week. Pickings are understandably thin as the festive season ramps up. Even quieter the following Christmas week. So I had to look into January, when we traditionally get updates from the well-known retail names about their key Christmas periods.

I had planned on noting only the first batch, in week one of 2019. I ended up checking the investor relations page of every consumer-related UK Index company I could think of. The list  ranges from Supermarkets to retailers (clothes, shoes, white goods, tiles/carpet, baby stuff, pet food, bikes, car spares, games, greetings cards, wine) to pubs and takeaway pizza and pies/sausage rolls.

January will once again be a key month for traders and investors, updating us on how companies have performed individually. It will also refresh expectations for the all important outlook. But most of all it’ll be a health check on the UK consumer and struggling UK high street/retail sector. The latter is key with so much Brexit uncertainty (for consumers and retailers alike). Especially while the high street/retail sector goes through a generational change, hampered by high rents and fierce internet competition.

It all starts with Next on Thursday 3 Jan. To give you an idea of the importance of this update, 2018’s January statement pushed shares +6.7% on upgraded guidance. A year earlier they dropped 14%, Christmas sales falling (expectations were for growth) and “preparing for tougher times”. A 4.6% fall in Jan 2016 came after Q4 was hurt by unusually warm weather. Much like we’ve had this year. The Next share price chart shows a tendency for a big share price move in early Jan. This offers potential for read-across to peer retailers.

Without going through all 40 on my list, other names to look out for include troubled Debenhams (and Sports Direct which owns 30%) on Friday 4 Jan. With the shares down at 5p (just a £67m market cap) will it offer good or bad news to the market, and part owner Mike Ashley? That said, I’ve always believed he’s happy to lose on retail investments. Why? Because, if they collapse he’s front of the queue to buy the assets on the cheap.

The big Supermarket trio update within 3 days of each other. Moves of 2-4% are the norm, but 5-8% is possible. Depending on how much we spend on festive gluttony, a diverse list of names fill the calendar for the next three weeks.

Most days in January (I make it at least 12 of 22 trading days) offer an update from one retailer/consumer-focused company or another. This means potential for big individual and/or peer share price moves. Be it positive or negative. Internet-biased names may continue to fare well. Those with more of a bricks ‘n’ mortar presence may suffer further. Then again, some have suffered so much that even less bad news can result in a relief rally.

Will UK consumers have splashed the cash this Christmas? On-line or in-store? Will they have celebrated in the pubs, or stayed home? Will distressed names and investors get a nice New Year present or be lumbered with a lump of coal?

Whether you have a position in one name or several, big or small, doing well or faring badly, by all means enjoy the Christmas break, but make sure to be rested for a busy New Year of investment and trading opportunities in the exciting UK retail Sector.

For my full list of retail names reporting in Jan get access to research and daily trade opportunities, including breakouts, ranges, momentum and rebound candidates.

Mike van Dulken, Head of Research, 14 Dec 2018