Bonmarché, Diageo and Majestic Wine

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“Equities opened on the front foot following rises on Wall Street and in Asia with traders already looking ahead to tonight's interest rate call by the US Federal Reserve. This morning, they will scrutinise UK public-sector net borrowing numbers and also the fine detail of the Bank of England's quarterly bulletin,” says AJ Bell Investment Director Russ Mould.

“The vagaries of the British weather continue to cause headaches for fashion group Bonmarché. Earlier this year it blamed poor weather for difficult trading conditions. Now, it is feeling a chill from the Indian summer with sizzling temperatures hitting sales of its autumn collection. Bonmarché expects first half like-for-like sales to be down by around 8% and full-year profit expectations have been lowered. Bonmarché’s shares fell by more than 28% in early trading.

“Drinks giant Diageo is confident of hitting growth targets after a good start to its financial year. Diageo has maintained the momentum created through improved marketing and innovation. Key drivers of growth are Scotch whisky, US spirits and India.

Majestic Wine’s shares slumped in early trading after it warned 2017 earnings would be below forecasts. The turnaround plan in Majestic Retail is progressing well but the group’s ‘test and learn’ strategy has not been a universal success. This approach, where capital is quickly redeployed from underperforming areas, is delivering good results in most business units but the scale of the US market means that even a test can have a material effect on profits. The group remains on track to hit its three-year plan of £500m in sales by 2019. Majestic Wine’s shares were down by over 25%.”

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