Next week on the stock market

Next has been getting into the habit of delivering positive news lately. In a short trading update last month, results on both the top and bottom lines beat market expectations. This led to yet another upgrade to full-year pre-tax profit guidance, getting a bump up from £960mn to £980mn.

Second-quarter full-price sales had been expected to fall slightly, but thanks to strong overseas online growth, the group posted growth of 3.2%. Despite already accounting for more than half of group sales, we continue to see the online channel as the main growth driver. Expansion overseas is still in the early stages, and we see a lot of room left to run if Next can execute its strategy well.

Retail is a different story, with in-store revenue falling 4.7% in the first half. We’re not expecting that trend to change going forward, with high-street shopping in structural decline. But in next week’s results, we’d like to get more clarity on the outlook for stores and hear how the group’s positioning itself to manage the shift.

A director of Hargreaves Lansdown plc is a Non-Executive Director of Next plc.

Ocado’s valuation’s been under pressure lately, but its last set of results delivered some positive news to investors’ doors. Revenue grew 12.6% to £1.5bn in the first half, with all business units seeing an uplift. Increased active customer numbers, which rose 8.1% to nearly 1.04mn, were the biggest driver of growth as price increases contributed a smaller amount.

Full-year revenue growth guidance suggests a slowdown in the Retail and Technology Solutions businesses in the second half. But the latest sector data shows that Ocado was the fastest-growing UK grocer in the 12 weeks to 1 September. As a result, we’re keen to see if there’s scope for a more positive outlook when the group announces third-quarter results next week.