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Well, let's take a look at some of the stocks on the mode today in Europe. I'm Stephen Carroll and I'm joined by Bloomberg's Chloe Melee for more. Chloe, good morning. Let's start in the UK and the retailer Next has some thank you letters to be writing.
Why yeah, absolutely well to Santa in particular. So Next boosted its profit target for a fifth time this financial year, and that was thanks to really strong sales over the Christmas period. So the sales were super strong in international markets in particular, but even in the UK, where expectations were a little bit more muted, growth was actually ahead of those estimates as well. But it's not because the Christmas spirit was strong that twenty twenty six will necessarily
be golden either. So Next did warn that profit in sales would grow slower pace in the year ahead. It blamed rising unemployment and slowing wage growth, which means of course that there will be more constrained consumer spending, more uncertainty, less money to just spludge on nice clothes. And you know, Next is usually quite cautious with its guidance and so the fact that it had this world of caution isn't wasn't necessarily taken like a real warning from the market,
and the chase did still rise. But it's worth keeping in mind that they are still challenges for Next and for other peers within that British retail sector. And there will be more details on that when we get some of the food retailers reporting some Christmas trading updates as well later this week. We've got Tesco and Sainsbury's as well as em and s keeping US updated later this week, so we'll see what's happened there as well.
Okay, so more to watch for on the UK consumer front. Accado meanwhile delivering fresh gains. This is after the latest report by analysts JP Morgan. What have they said.
Yeah, it's a good day for Ricado.
They were placed on a positive catalyst watch by JP Morgan. There was also a monthly report from an industry researcher that showed that Ocado would once again the UK's fastest growing grosser in December, so there's kind of two positive things there for Ocado. If we go back to the positive catalyst watch from JP Morgan, they said that there is now greater operational stability at the company after some
recent setbacks. Of course, we remember the biggest one was when Ocado's biggest customer, Kroger, announced it would close three automated warehouses that were operated by Ocado, and that had sent the shas plunging and really hurt investor confidence in the company. But now there is a lot more clarity on that partnership with Kroger.
There is also Acado going.
To be pursuing more deals in more markets after ending some exclusivity agreements, and JP Morgan analysts also said that the balance sheet looks much sturdier, much stronger. So all of that means that perhaps a card we'll be back on track in twenty twenty six, so we'll be looking for that as well going forward.
Okay, let's turn next to Microchip. Got some traders watching europe tech firms for non micro gains.
Yeah, so Microchip over in the US has said that it expects higher sales than previously thought, So that's taken by the market as a sign of recovery for industrial and automotive end markets. So This is a good day then for semiconductor companies in Europe that are exposed in particular to those end markets. So we're talking about Infinian
and st Micro. We've have course talked a lot about semiconductor companies and their exposure to AI and how much they benefit from that, but there's a lot of other sectors that need chips, including cars and factories for a lot of other things, and there's been a lot of weakness recently in those end markets and really a lot
of uncertainty about when that would lift. So the fact that Microchip has signaled rebound there is really reassuring for Infinian and st Micro, especially given that those two actually had said previously that the quarter that is that ended in December would be below seasonal trend, so they might actually be doing.
Better than they expected.
There's still a gap in stock performance between those names and then the names that are a little bit more exposed to AI in that semiconductor sector. So let's see if that recovery in those end markets brings that gap, well, you know, closes that gap a little bit more.
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