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Homeware retailer, Dunelm, has defied the Christmas retail gloom, announcing it expects to exceed its full year expectations after a positive customer response to a new website. The news sent share prices soaring by 19 per cent, to 995p at the time of writing, the highest it has been since March 2016. Along with the success of the website launch, the budget home retailer said it anticipates better than expected gross profit margins due to buying products at better prices and improved sell through. Dunelm has had a string of positive updates and earnings upgrades recently although its sales did slow down in October after it posted a less than favourable Q1 update. So, can Dunelm continue to delight its investors by delivering a stellar festive period? Analysts are certainly impressed – Peel Hunt has upgraded its rating from ‘add’ to ‘buy’, and Stifel has updated its target price to 1,010p and upped its 2020 profits forecast by 5%. Dunelm’s new digital platform has been lauded as a success with Peel Hunt describing it as ‘well-executed’ and ‘delivering a lightning fast experience for customers.’ One potential blip on the horizon for the homeware retailer is the possibility of the election result impacting on non-essential spending, but at the moment Dunelm has 11.1% of sales in the UK’s £13 billion homeware sector which has to be good news for shareholders.
Film fans have not been flocking through Cineworld’s doors over the last few months, prompting the cinema chain to issue a profit warning as it announced its box office takings had fallen 12.8%. The chain said cinema admissions for the 11 months to December had fallen by 13 per cent and it blamed delayed releases of blockbusters such as Joker and Frozen 2 for the freefall figures. So, is it looking like horror for Cineworld or is there a comeback in store yet? Initially shares shot up after the profit warning, although after a quick boost prices were down by nearly four per cent. It looks like this initial jump was down to Cineworld becoming one of the most shorted shares on the stock exchange – eleven institutions hold disclosed short positions making up 12 per cent of the company’s total shares. The cinema chain is heavily in the red – its acquisition of US chain Regal last year has left it with £2.3 billion worth of debt and £2.8 billion worth of lease commitments. Cineworld released an upbeat statement with Chief Executive Mooky Greidinger saying that: “despite a challenging backdrop, Cineworld has continued to execute well”, and pointing out that the second half of the year started strongly thanks to blockbuster releases. Analysts have pointed out that though that Cineworld’s future prospects are still heavily dependent on the success of the latest films, taking its destiny out of its own hands to some extent.
Luxury car brand, Aston Martin, has seen its share price accelerate into the fast lane amidst talk of a bid for a significant stake from billionaire racing car boss, Lawrence Stroll. Aston Martin has weathered a turbulent first year of flotation but the suggestion that Racing Point owner, Stroll, wants to buy-in has sent stock soaring by 20 per cent, now standing at 595.48p at the time of writing. Aston Martin issued a profit warning over the summer as its sales faltered and it become embroiled in a row with shareholders over executive pay. There are rumours that if Stroll’s unconfirmed bid is successful he will look to re-brand his racing team as Aston Martin, so is now a good time to invest in the luxury brand? While Stroll’s interest is speculation at present, investors look to be taking it seriously and the car maker is showing other signs of recovery – full production of its latest DBX sports brand is scheduled for next year and a new James Bond movie on the horizon is likely to lift the brand further.
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