Must read: Bank of England, H&M, Mitchells & Butlers

GLOBAL MARKETS

Risk-off sentiment is dominating after declines on Wall Street dragged European indices into the red. Halma is the top gainer on the FTSE 100 after raising its revenue growth guidance while ConvaTec Group (LSE:CTEC) and Phoenix Group Holdings (LSE:PHNX) are at the bottom of the basket.

Elsewhere, shares in DFS Furniture (LSE:DFS) are up around 5% thanks to forecast topping annual earnings despite the challenging consumer backdrop. The Co-operative Group said the recent cyberattack cost the company £80 million including £20 million in one-off costs as well as a £206 million hit to revenues.

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Yesterday evening, Bank of England policymaker Megan Greene said she believes in ‘a cautious approach to rate cuts going forward’ adding ‘the risks to our inflation outlook have shifted to the upside.’

US futures are pointing to a flat open after Wall Street closed lower on Wednesday as AI and the Fed continue to dominate price action.

H&M

H&M reported third quarter operating profit of 4.91 billion crowns, versus forecasts for 3.68 billion and up from 3.51 billion year-on-year. Sales came in at 57 billion crowns, in line with expectations but down from 59 billion in reported currency.

Amid the backdrop of trade barriers, macroeconomic uncertainty, geopolitical events, foreign currency headwinds, and a cautious consumer, H&M has delivered an impressive update. It achieved a sharp 40% boost to third quarter operating profit and a higher gross margin thanks to good cost control, a strong line of apparel that has chimed well with customers and a firm commitment to affordability. Sales increased by 2% in local currencies even with 4% fewer stores. There is lots to get excited about going forward for the company too – it said the autumn collections have been well received and it opened first store in Brazil, a significant new market with major growth potential where its rival Zara already operates.

Shares in H&M are soaring today in Sweden, up around 9% having initially soared as much as 12% at the open, helping to reverse some of its declines over a one-year period.

MITCHELLS & BUTLERS

Mitchells & Butlers (LSE:MAB) reported like-for-like fourth quarter sales growth of 3.1%, falling from 5% in the previous quarter. This was its slowest quarter of the financial year for the company behind Toby Carvery and All Bar One. While mid-market continues to perform well, its premium business and venues in London have struggled.

Traders are disappointed with today’s update, reflected by a sharp decline in its shares down around 7% to hit a 5-month low. There are concerns about macroeconomic pressures with growing slack in the labour market and a sluggish consumer coupled with ongoing inflationary pressures which increase costs and hurt margins. Hospitality has been hampered by mushrooming costs with painful food inflation in the UK as well as headwinds from the higher minimum wage and national insurance increase. M&B anticipates cost inflation of around £130 million next year of 6% of its total cost base, so cost control will continue to be a priority.