Equities Update: Primark, Dunelm, GameStop, ABF, The Gym Group, Zara…

ABFs safe bet is facing a stress test

Mark Crouch, market analyst for eToro, says: “Primark has long been the jewel in ABF’s crown, a retailer that’s thrived on value, volume, and an uncanny knack for reading the consumer mood. But today’s update raises more questions than it answers. Sales growth is slowing in Europe, flat in the UK, and while the US is picking up pace, it’s still not enough to counterbalance weakness elsewhere. For a business often seen as retail’s early warning signal, the signs don’t look good.

“Womenswear has been the standout performer, perhaps the final line of defence, with female shoppers so often the heartbeat of high street fashion. But even the most loyal customers have their limits, and If Primark starts to feel the pinch, it’s likely others may soon feel the squeeze.

“Elsewhere, the surprise Hovis deal could give the group a much-needed lift, pun intended. With sugar proving a sticky business, following a £101m charge and the closure of ABF’s Vivergo plant, the pivot deeper into bakery makes strategic sense. It’s less exposed to commodity swings, and with potential for scale-driven margin gains and stronger pricing power, that’s something ABF needs now more than ever.”

Vistrys new deal could offer a lifeline as profits collapse 

Mark Crouch, market analyst for eToro, says: “After a bruising 2024, 2025 was supposed to be a time to rebuild for Vistry. However the latest results suggest the foundations remain shaky at best. Profit before tax has collapsed by 33%, completions are down, and margins remain under pressure. For a sector starved of confidence, this update will do little to steady nerves, and for investors, it raises fresh doubts about just how long the recovery will take.

“The broader backdrop remains hostile. High rates, planning delays, and sluggish transactions continue to choke momentum, much of which was expected to ease following Labour’s victory. In that context, the newly signed joint venture with Homes England feels less like a growth lever and more like a lifeline.

“The deal positions Vistry as the UK’s go-to partner for affordable, public-private housing delivery. Low-risk, policy-aligned, and capital-light. That narrative still holds but with profits sliding and sentiment fragile, even sturdy partnerships may struggle to hold up the roof.”

The Gym Group keeping up the pace on growth and membership 

Adam Vettese, market analyst for eToro says:“The Gym Group’s latest interim results show the company is doing a lot of heavy lifting as a leading player in the low cost fitness market, delivering growth in revenue and membership despite a competitive environment. Revenue was up 8% to £121 million in the first half, driven by a 4% uplift in average membership and further improvement in yield per member. Expansion remains on track, with three new gyms opened and a healthy pipeline supporting the goal of 14-16 openings in 2025. Cost controls and operational efficiency have seen net debt reduced to £51.2 million, though it’s expected to trend higher due to weighted investment in the second half. While the group’s capital expenditure commitments are sizeable and profitability metrics leave little near term cushion, management’s focus on targeted marketing and site proposition evolution is clearly paying dividends in terms of ongoing membership growth and sustained engagement.

“For investors, the Gym Group offers structural exposure to growing fitness demand but does carry risks around debt and margin pressure amid sector competition. Delivering on planned site openings and maintaining yield improvement will be crucial for translating operational progress into shareholder returns in the coming quarters. Despite this mornings price boost, shares are still around half of what they were at either the pre or post pandemic peaks and investors will want to see continued membership and revenue growth translate to further returns going forward”

Zara parent Inditex shows margin resilience, but growth momentum slows

Lale Akoner, global market analyst, says: “Inditex’s latest results underline the resilience of its model but also the constraints of the current retail backdrop. The group continues to demonstrate pricing power and operating discipline, with margins holding steady despite currency headwinds and cost growth outpacing sales. That said, the deceleration from post-pandemic highs is evident, and the reliance on FX-adjusted growth to sustain momentum highlights the sensitivity of earnings to macro conditions.

“The 9% pickup in early third-quarter sales is encouraging, suggesting that brand strength and supply chain agility remain intact, yet investors will want to see this sustained in a weaker consumer environment. Inditex’s ability to balance efficiency gains, innovation in formats like Lefties, and global expansion against external pressures will determine whether it can re-rate toward historical valuation premiums. For now, the shares look supported by best-in-class profitability, but upside may be capped without clearer evidence of sustained top-line acceleration.”

GameStop Q2 earnings preview

Lale Akoner, global market analyst, says: “GameStop reports this week, with little optimism around its core business. The retailer continues to struggle as video game sales shift online, leaving stores increasingly reliant on collectibles. While trading cards have grown sharply, the segment is unlikely to offset shrinking hardware and software revenue. Investors remain wary after the company announced a $1.75 billion convertible bond sale, which sent shares tumbling, and concerns over the perception of a distracted business strategy.

“With foot traffic under pressure and profitability elusive, expectations are for another weak quarter highlighting GameStop’s uncertain path forward. The company’s efforts to expand card-grading services and push deeper into collectibles highlight a pivot away from its traditional model, but execution risks remain high. Until management proves it can stabilise revenue without relying on financial manoeuvres, sentiment is likely to stay cautious, and the stock’s volatility elevated.”