M & S (MKS), Next (NXT) & Frasers (FRAS): 3 retail stocks for long-term

3 min read | October 15, 2021 10:00 AM BST | By Nidhi Gupta

Highlights 

  • Marks and Spencer have unveiled its new large-scale store at Leamington Spa in Warwick.
  • Next reported a 63.4% year-on-year increase in sales to £2.2 billion in H1 ended 31 July 2021.
  • Frasers Group has been focusing on investing in an omnichannel retail strategy.

A majority of retailers in the UK plan to increase prices on products by the end of the year. According to the British Retail Consortium, about 10% of the UK retailers have already increased prices, and 60% of retailers plan to increase prices by the year-end due to rising supply chain costs. Retail businesses are currently witnessing rising costs related to energy and wages, among others.

Fresh concerns are arising due to delays in Christmas deliveries as the country’s busiest port - Suffolk port  - would begin to refuse empty return containers. The huge cargo build-up has resulted in the shipping giant Maersk to divert vessels away from the port. The shortage of HGV drivers has resulted in severe congestion at the port and is expected to impact deliveries for the upcoming holiday season if the vacancies are not filled in time. Let us explore the investment prospect in 3 retail stocks - Marks and Spencer, Next and Frasers Group.

M & S, Next & Frasers: One year return and market cap

(Data source: EODHD/Others)

Marks and Spencer Group Plc (LON: MKS)

Marks and Spencer Group is an international retailer that specialises in the sales of clothes, food and homeware. Yesterday, on 14 October, the British retailer unveiled its new large-scale store at Leamington Spa in Warwick. The company had previously announced the closure of its Broadmead store in Bristol in January 2022.

The shares of Marks and Spencer Group last traded at GBX 183.35, up by 0.41% at the close of the day’s trade on Thursday 14 October 2021. The market cap of the company is £3,575.98 million.

Marks and Spencer’s clothing and home revenue rose by 92.2% year-on-year for the 19 weeks to 14 August 2021. However, the company expects adjusted profit before tax for the full year to be about £350 million.

In the last one year, the shares of Marks and Spencer gave a return of 94.64% to shareholders.

Next Plc (LON: NXT)

Next is UK-based multinational footwear, clothing, and home products retailer. Last month, the US-based clothing retailer Gap entered a partnership with Next for expansion of its business in Ireland and the UK.

The shares of Next last traded at GBX 7,808.00, up by 2.71% at the close of the day’s trade on Thursday 14 October 2021. The market cap of the company is £10,159.98 million.

Next reported a 63.4% year-on-year increase in sales to £2.2 billion in H1 ended 31 July 2021, and operating profit was £392.5 million H1 2021 compared to £34.1 million H1 2020. The retailer’s online sales escalated to £1.5 billion in H1 2021, up from £862.6 million in the previous year.

In the last one year, the shares of Next gave a return of 29.36% to shareholders.

Frasers Group Plc (LON: FRAS)

Frasers Group is UK-based retail and intellectual property company. It trades through the Sports Direct brand through online and physical channels. The company has been focusing on investing in an omnichannel retail strategy.

The shares of Frasers Group last traded at GBX 632.00 at the close of the day’s trade on Thursday 14 October 2021. The market cap of the company is £3,209.82 million.

Frasers’ revenue for the year ended 25 April 2021 was £3,625.3 million compared to £ 3,957.4 million in 2020, representing a year-on-year decline of 8.4%. Its reported profit before tax was £8.5 million in 2021 compared to £143.5 million in 2020.

In the last one year, the shares of Frasers Group gave a return of 74.49% to shareholders.

 


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