Over the past month, FTSE 100 (INDEXFTSE: UKX) retailers Ocado (LON: OCDO) (OCDO.L) and Next (LON: NXT) (NXT.L) have both released share price news and updates.
On 1 April, Next released its full year results. They showed a decline in full price sales of 15% in the year ending January 2021. This decline was largely due to a 48% drop in retail sales, while finance sales declined by 7%. Offsetting these falls weas a 10% rise in online sales, with them now expected to account for 71% of sales in the company’s 2022 financial year.
The company’s 2021 profit before tax of £342 million was in line with its guidance. It represented a 51% decline versus the prior year. Despite its fall in sales and profit, the company was able to reduce year-end net debt by £502 million so it stood at £610 million.
Clearly, Next’s performance was heavily impacted by the pandemic. It forced the closure of many of its stores for large parts of the financial year, and also inhibited its online sales performance as distancing measures limited its volume capabilities.
In the 2022 financial year, the firm expects to post sales equivalent to those of the 2020 financial year, as well as profit before tax of £700 million. It expects to manage the loss of over £500 million in sales from its stores through an increase in online sales. It believes that it is better placed now than it was before the pandemic to meet the opportunities presented within online retail.
As well as its annual results, there have been a few director deals in the past month. They were made up of gifts of shares to spouses, as well as share awards to senior management.
In the past month, the Next share price has gained 2% versus a 3% rise for the FTSE 100 index. Over the past year and five years, the company’s stock price has risen by 75% and 55%, respectively. It currently trades at 7962p.
Meanwhile, FTSE 100 index retail peer, Ocado, released news of its investment in autonomous vehicle software company Oxbotica on 16 April. It plans to develop a range of vehicles that will be integrated into the online grocery retailer’s operations.
The £10 million investment forms part of Ocado’s overarching goal to deliver cost savings, since logistics constitute the single largest line item in operating costs for online grocery companies. It also thinks there is scope to improve its capability to respond quicker and more effectively to peak delivery demands that could provide a better experience for consumers.
As well as news of its investment, there have also been several director deals in Ocado’s shares. They have largely been awards under incentive plans, as well as a purchase of just under £20,000 of the company’s shares by non-executive director Julie Southern on 24 March.
Over the past month, the Ocado share price has risen by 5%. In the past year and five years it has gained 25% and 577%, respectively. It currently trades at 2167p at the time of writing.
Not Investment Advice
Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.