Must read: Burberry, Currys, UK inflation 

Earnings are front and centre for investors with Q4 results from Netflix on Tuesday and Q3 numbers from Burberry Group (LSE:BRBY) on Wednesday. The economic calendar will also bring key UK economic data including inflation and unemployment as well as an interest rate decision from the Bank of Japan. 

• Our Services: SIPP Account | Stocks & Shares ISA | See all Investment Accounts

Burberry Q3 – Wed 21 Jan 

Richard Hunter, Head of Markets, interactive investor says, “At the half-year results in November, the numbers were flattered by comparisons to the group’s previous “annus horribilis”, but nonetheless a promising new trend could be emerging as a result of the new “Burberry Forward” strategy.

The shares have risen by 35% over the last year, enabling the group to rejoin the FTSE100 in September. However, they remain down by 42% over the last three years, which gives an indication of the mountain Burberry still needs to climb, especially in two of its most important regions, namely the US and China.

The most recent update saw comparable store sales flat in relation to the corresponding period, but ahead by 2% in the second quarter, which represented the fourth consecutive quarter of improvement since the new CEO was installed. It was also the first quarter of growth in two years, ahead of the expected 1%, and vastly improved on the negative 20% of the previous year, all of which provided some comfort to investors.

The outlook comments were optimistic but not cavalier. Burberry fully recognises that the transformation is still in its early stages, and that of course the fashion industry can be a fickle business. At the same time, a brand which had moved away from its traditional British traits of heritage and innovation, which had such appeal to overseas buyers and particularly tourists with an aspirational and stylish look, needs to be reestablished. 

• Investment outlook: expert opinion, analysis and ideas
• 5%-plus yields: fund and investment trust ideas in 2026
• The Income Investor: why this high-yield FTSE 100 REIT appeals

There is also a particular emphasis on the outerwear for which it has become traditionally known, which is currently outperforming expectations. It remains to be seen whether the new found momentum was continued in the “golden quarter” which included the festive season.

As such, the pressure will is on Burberry to maintain growth and demonstrate that the second quarter performance was not a flash in the pan.”

Currys trading statement – Wed 21 Jan

Richard Hunter says, “Hopes will be extremely high for the group’s Christmas performance, which could add to a stellar run which has seen the share price increase by 49% over the last year, and by 165% over the last two. While Sainsbury-owned Argos may have struggled in this space over the festive period, Currys (LSE:CURY) has a significantly different offering.

Some 59% of group sales come from the UK & Ireland, where the group reported a 6% rise in revenues at the half-year results in December. This included a spike of 35% in New Categories sales, albeit from a low base and was achieved despite the concerns echoed by many retailers of the Budget fallout, and where previously Currys had estimated an additional £32 million in annual costs.

The previous thorn in the side had been the Nordics business, but this unit is showing strong signs of improvement. The Nordics account for around 41% of group revenues and so its performance is material on the group impact. Revenue growth of 7% compared to the previous year was accompanied by adjusted earnings of £35 million, up by 94% on the previous year.

• Big yielder among construction top picks
• The FTSE 100 has broken 10,000: which active funds are beating it?
• Sign up to our free newsletter for investment ideas, latest news and award-winning analysis

Overall, Currys continues to target higher margin revenue streams which also bring recurring income, such as its mobile plans, Care and Repair, credit provision and protection plans. The mobile business saw an increase of 21% taking the subscriber base to over 2.4 million as the pricing point offered clearly resonated with the more cost-conscious consumer.

The group’s omnichannel offering continues to bear fruit, and indeed two-thirds of customers prefer to shop in store, partly as a result of the expert advice available on a face-to-face basis. This can also lead to a longer relationship with the customer as well as the potential of cross-selling.

Of course, Currys cannot guarantee an unfettered run in growing its business. Quite apart from the ongoing repair work being undertaken in the Nordics business, the outlook for the economy is currently unstable, which could crimp consumers’ propensity to spend, especially on discretionary items such as computing. Even so, the group entered its peak trading period in good shape and reiterated its guidance for full-year pre-tax profit of £170 million.”

UK Inflation

Victoria Scholar, Head of Investment, interactive investor says, “It is a busy week for UK economic data with the latest unemployment figures on Tuesday and December’s inflation reading on Wednesday. 

Inflation is expected to rise slightly in the short term either in December or January’s reading after November’s headline CPI unexpectedly dipped to 3.2%, beating expectations for 3.5%. However, longer-term the trajectory for inflation is still on the downside, heading back towards the 2% target later this year. November’s Budget from the Chancellor was largely viewed as disinflationary owing to its contractionary fiscal measures  including tax increases and spending cuts. Plus there are growing signs of slack in the labour market, also easing inflationary pressures in the UK economy. 

The good news is that this paves the way for the Bank of England to push ahead with between two and three further rate cuts in 2026, which could help support stock market returns.”