As every trader knows, after the holiday season comes earnings season.

And while every trader will have their favourite sector to trade, there’s always one that falls under the spotlight ahead the others. This year has been no exception, with the Retail sector stealing the headlines, some companies for good reasons, and a lot more for the opposite.

When the November UK Retail Sales figure was released in December – impressively topping estimates to reach its highest level since the Summer (1.5%) and emphatically recovering from October’s 4-year low of 0.1% – it was always going to be a tough act to follow. Just how tough, however, came as a surprise.

Earlier today, Retail Sales over the key Christmas trading period came in at a paltry 1.4% against estimates of 3%, and was lower even than November’s print.

Why was this? The continued impact of a pinch on consumers’ pockets as a result of high inflation (~2.9% 6-month average) and subdued wage growth (~2.2% over 6 months) saw a greater number of shoppers taking advantage of better deals available around Black Friday sales, while spending more frugally in December.

And what have the ramifications been for businesses? With some notable exceptions, the UK high street has been under fire since the first results rolled off from senior managements across the country.

It all started well enough; a fortnight ago, Next reported record Christmas sales, leading to their shares rallying an impressive 6.7% on the day. However, it was soon to be a much gloomier affair.

In the same week, Debenhams‘ share price collapsed 20% last week after reporting a Christmas sales slump.

Last week, Mothercare reported sales dropped 25% after a 7% drop in Christmas sales and suit maker Moss Bros cut its profit forecast after lower footfall over the Christmas period.

Also last week, both Boohoo and Marks & Spencer fell 7.6% and 7.0% respectively, the former even after upgrading guidance for the second time in four months, as their updates disappointed the market (Boohoo faces margin pressure while M&S sees continued sales deterioration).

Burberry this week saw its shares fall 9.3% on a deteriorating UK picture, and the season so far has culminated today with Carpetright’s near halving of its share price following exceptionally weak Christmas trading as a result of lower consumer spending.

Some bright spots appeared in the form of Ted Baker (10 Jan; +9.9%), AO World (11 Jan; +7.6%), B&M European Value Retail (12 Jan; +5.0%) and JD Sports (16 Jan; +6.7%), however can the final few names left to report in the sector emulate these performances?

Next week, ASOS (Boohoo/Footasylum/JD Sports), Dixons Carphone (AO World/Sainsbury), Pets at Home and WH Smith (Booker) all report their all-important Christmas updates. Will it be a Christmas blow-out or a bumper haul for the final few names?

Amid the hectic nature of earnings season, even the best traders need help sifting through the deluge of companies reporting. Which is where our research team can step in and help.

They are on hand to pick apart the sometimes confusing statements, finding the key numbers that are buried deep within the release, and sharing the all-important figures with our clients before the market open.

Find out just how much they can help your trading by signing up to have our full research offering delivered directly to your inbox.

Suni Dhanjal, Trader, 19 January 2018