Shareholders are crying ‘Next!’ this morning as they seek out alternative investment candidates. This comes after the high-street retailer delivered a surprisingly downbeat outlook easily outweighing what was otherwise a slight beat for 2015 annual results. Saying you expect FY16 to be ‘challenging year’ on account of ‘much uncertainty in the global economy’, potentially the’ toughest we have faced since 2008’, and downgrading revenue guidance is never going to inspire investor confidence. Especially with shares already bumbling around 2yr shallow rising support awaiting a positive driver.

So it’s no surprise to see that key trendline easily breached to the downside this morning and the shares testing a 6000p level last traded in early 2014. It’s early days for FY16, but traders are obviously pricing in the possibility of results this time next year coming in at the lower end of today’s new gloomy guidance. Perhaps they prefer to run the risk of being pleasantly surprised rather than sorely disappointed. With corporate outlook so key in the current economic environment it’s almost a non-event that FY15 profits grew by a modest yet respectable 5% on revenues up 4.5%. Even a 5% increase to the final dividend has flown under most traders’ radar.

Mike van Dulken, Head of Research, 24 Mar