Charles Stanley on John Lewis: “The retail backdrop is tough but management and partners can give themselves a genuine pat on their backs”

 

Garry White, Chief Investment Commentator at Charles Stanley, comments: “There’s no doubt that the retail backdrop is tough, but management and partners at John Lewis can give themselves a genuine pat on their backs. For the first time in three years the department store has posted a first half profit, as its turnaround strategy kicks in. Despite the difficult retail backdrop – sales were actually down 3% – it looks like the partnership will be in a great position to restart its staff bonus programme at the end of this year. Suspended since 2000, management has hinted it is considering reinstating the payment. These results and the outlook for the rest of the year probably means the partners are likely to expect it. Management is unlikely to want to disappoint.”

 

Trainline powers ahead with earnings upgrade

 

 

Lale Akoner, global market analyst, says: “Trainline raised its profit guidance and announced a £150m buyback, a move that reflects both strong cash generation and confidence in future growth. Net ticket sales rose 8% to £3.2B, with standout 34% growth in France as new competition on high-speed routes attracted more passengers. The UK business remains solid, but it’s the international side that’s proving Trainline’s ability to capture demand as markets open up. While the UK remains steady, the real driver is European rail liberalisation, where rising competition is fuelling demand and giving Trainline the chance to capture a bigger share of a growing market. Recent momentum in France highlights how structural changes can translate directly into earnings upside.

“Trainline is evolving from a UK-focused ticketing platform into Europe’s default rail aggregator. The combination of resilient domestic demand, expanding international opportunities, and consistent capital returns suggests the current valuation may not fully reflect the company’s scalability. In short, earnings are being driven by structural growth rather than one-off factors, and that positions Trainline as a compelling long-term play on Europe’s shifting rail landscape.”

Can Molson Coors partnership put the fizz back into Fevertree?

 

Mark Crouch, market analyst for eToro, says: “Fevertree’s much-heralded partnership with Molson Coors, was meant to put some fizz back into the premium mixer. A gateway to scale a chance to sharpen its presence in the all-important US market. There are signs of promise, US revenues edged higher in the latest update, helped by stronger distribution and brand visibility. But momentum still feels laboured.

“At home, however, the picture is less effervescent. UK revenues have declined, and the domestic market, once the brand’s powerhouse, looks increasingly saturated. Relentless cost-of-living pressures, soaring borrowing costs, and a sharp pivot towards value are forcing consumers to make tougher trade-offs, particularly in discretionary categories, where premium mixers are no exception.”

“For investors, the transatlantic tie-up ticked all the right boxes, strong brand, global runway, heavyweight partner. But the market remains unconvinced. Shares have jumped this morning however, so while today’s update will offer some encouragement, global macro headwinds are still putting a cap on any recovery, no matter how well mixed the strategy may be.”

 

Wickes grows revenue but needs to nail the big-ticket category

Adam Vettese, market analyst for eToro says: “Wickes has done well to repair top line numbers in the face of continued consumer caution and economic headwinds, with revenue rising 5.6% and adjusted profit before tax growing by a healthy 17%.

“The standout area was strong volume-led growth in retail, including a 10% uplift in TradePro sales and record market share gains across timber, garden, and decorating categories. Notably, the Design & Installation business returned to like-for-like growth in Q2 following targeted improvements to customer experience, a vital step as demand for bigger-ticket projects remains sensitive to cost of living pressures.

“Wickes’s ongoing share buyback and maintained dividend reflect management’s confidence in cash generation and balance sheet strength. However, discretionary spending in the home improvement market is still subdued as households prioritise smaller scale DIY and repairs over major renovations.

“As weaker rivals exit, Wickes is consolidating its position, supported by digital investment and operational improvements, but investors should monitor margins and the pace of recovery in high-value categories. Overall, these results demonstrate defensive qualities and strategic momentum, even as the sector navigates macro challenges. That said, shares continue to pare the gains made in H1 and investors will be looking for a resumption of the upward trajectory.”

 



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