The reopening of high streets next month could lead to some big moves in some retail stocks. Especially as stores will now be permitted to stay open until 10 pm. Today, I’m looking at three examples from the FTSE 100, all of which just happen to be reporting to the market in April.
Next
First out of the blocks is clothing giant Next (LSE: NXT). It’s scheduled to release its latest set of full-year numbers to investors on 1 April.
Based on the performance of its share price over the last year, it’s hard to imagine there’ll be any nasty surprises. The market is always forward-looking and Next’s valuation has more than doubled since April 2020.
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There are some that think there’s more to come. Last week, broker RBC upped its share price target to 8,800p on its belief the company will continue to benefit from its online offer, but also its decision to buy stakes in lingerie firm Victoria’s Secret and fashion label Reiss. RBC also suspects it won’t be long before Next restarts dividend payments.
I’m not about to disagree. Next has long possessed all the hallmarks of a great company. That said, it’s worth considering that consumers may direct their cash towards experiences rather than possessions in the coming months. Another potential concern is the possibility that online giants Boohoo and ASOS could steal some of Next’s customer base if their recent acquisitions bear fruit.
JD Sports
A second retailer scheduled to report full-year figures next month is leisurewear seller JD Sports (LSE: JD). Like Next, JD appears to have pivoted to its online offering pretty well during the crisis. It’s also preparing to enter new markets in central and eastern Europe and expand its US footprint.
Also like Next, JD’s share price has recovered strongly over the last year, soaring over 180%. By comparison, the FTSE 100 index is up ‘just’ 30%. Make no mistake, buying quality stocks when everyone else are losing their heads has the potential to be very lucrative.
Nevertheless, recent comments from executive chairman Peter Cowgill may unnerve a few holders. In an interview with BBC Radio in February, he remarked that Brexit has been “considerably” worse than he had expected. It’ll be interesting to see what the share price reaction is next month if this situation hasn’t improved.
Associated British Foods
A final FTSE 100 retail stock I’ll be watching in April is Associated British Foods (LSE: ABF).
Although nothing can be guaranteed, it’s possible that ABF may do better than most retailers in the weeks ahead. A lack of online presence could mean its Primark stores are more likely to be packed out on 12 April as shoppers look to replace the cheap threads they’ve worn out over multiple lockdowns.
Even if this rush doesn’t materialise, I think ABF shares could still do well. As I explained previously, the company benefits from a degree of sector diversification that most rivals don’t.
Naturally, there’s a flip side. Although the shares haven’t rallied as hard as the other FTSE 100 stocks mentioned, ABF certainly isn’t as cheap to acquire as it once was (26 times forecast earnings).
On top of this, there’s a chance those who’ve managed to save more during the multiple UK lockdowns will treat themselves to higher-quality clothes with a more sustainable profile rather than ‘disposable’ fast fashion.
