1347 Thursday 10 January 2019
Nearly a week into a week of reporting from UK retailers, we have a mixed bag of results. It’s fair to say that in general, most estimates of poorer performance have been quite accurate. There have been a few outlier’s coming in the form of Ted Baker, Halfords and others, but in general, the market doesn’t seem to be took shocked. Many of the reports that we’ve seen so far have read along the lines of ‘footfall down, saved by online sales…’ and that brings us to tomorrow’s report from AO World. The firm represent the first fully online company to report this year and with many High St. woes being blamed on stronger online rivals, AO Worlds performance will come under strong scrutiny.
A O World offer a wide range of electrical goods via their websites and direct competitors are Dixons Carphone and Amazon, the former will be reporting on 22nd January. Sales have been ever-present on their site since Black Thursday and a worry investors may have in mind is their profit margins, we saw what happened to Footasylum. Profits rather than revenue will be the key figures to look for in the report, especially as the firm reported an operating loss in the first half year results.
The current stock price of 129.20 is around their mid-August valuation, but is 50p down from its May high. Given the fairly stable recent price of AO.L, the results tomorrow will likely to be viewed as a gauge for the online earnings world by analysts, but it is worth paying attention for any sharp misses on estimates. As it appears that the future of retail is online, the amount of attention on AO’s report tomorrow could see some volatility in stock price.
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