Sector movers: Retailers fall as Next and Home Retail disappoint

11th Sep 2014 13:00

Poorly-received updates from the likes of Next and Home Retail Group ensured that the UK-listed general retail sector was firmly in the red on Thursday afternoon.High street giant Next delivered a solid first half with both sales and profits ahead of the company's original expectations, but under analysts' forecasts.Total sales increased 10.3% to £1.85bn, while pre-tax profit gained 19.3% to £324m, under the £329m consensus forecast.Analyst Freddie George from Cantor Fitzgerald said the figures were "strong but slightly light of very ambitious market forecasts".The stock was down over 3% in afternoon trade as investors took profits after the recent strong run. The shares had risen by nearly a third ahead of Thursday's results.Home Retail was trading nearly 5% lower after reported a mixed second-quarter performance with Argos like-for-like sales and Homebase's gross margins coming in worse than expected.The company said that it expects to meet current expectations for the full year but annual results, as always, will depend on trading for Argos at Christmas.Homeware retailer Dunelm, meanwhile, was trading more or less flat after a solid first-half performance was overshadowed by the surprise resignation of chief executive officer (CEO) Nick Wharton.Wharton said "the time is right for a new challenge" as he handed over the reins to executive deputy chairman and former CEO Will Adderley, who has been on the board since 1992.Others in the sector including Debenhams, Marks & Spencer, Beale and Primark owner AB Foods were also in negative territory on Thursday.In other retail news, unlisted department store bellwether John Lewis reported that pre-tax profits in its first half surged 88% to £130.6m, helped by decent online sales and a strong performance from its Waitrose division.Meanwhile, in the food retail sector the market gave a mixed reaction to interim results from Morrisons after the company reported a 51% drop in underlying profit, but increased its first-half dividend by 5%.The supermarket group said that the economic environment remains "challenging" and consumers are "still financially constrained", as it registered a 4.9% drop in sales. Top performing sectors so far todayElectricity 9,388.06 +1.49%Electronic & Electrical Equipment 3,738.51 +0.43%Personal Goods 24,197.35 +0.27%Equity Investment Instruments 7,047.94 +0.19%Life Insurance 7,388.71 +0.12%Bottom performing sectors so far todayIndustrial Metals & Mining 1,338.46 -2.84%Forestry & Paper 11,223.76 -1.51%Beverages 14,119.78 -1.25%Pharmaceuticals & Biotechnology 13,117.42 -1.08%General Retailers 2,753.23 -1.07%