Daily market update: Persimmon, Boohoo / Debenhams, Domino’s Pizza

“Investors took a moment to catch their breath after dramatic declines on global markets yesterday,” says Russ Mould, Investment Director at AJ Bell.

“Wall Street suffered a big hit as investors panicked that Donald Trump’s policies could lead the US into a recession. Asian and European markets were already jittery ahead of Wall Street opening yesterday, so their relative calm on Tuesday bodes well for US markets to follow suit later today. Indeed, futures prices imply small gains for the S&P and Nasdaq once Wall Street reopens for trading.

“This calm is positive for investors as long as it isn’t the calm before the almighty storm. It won’t take much to put investors’ nerves on edge again, particularly as Trump remains unpredictable.

“Ongoing uncertainty around tariffs and the potential impact on economies could cause companies to delay investment decisions and consumers to be more cautious on spending. Investors will cast a keen eye on corporate outlook statements over the coming weeks and months and study every economic data point to see if Trump’s decisions are spoiling the party.

“Housebuilders were in demand on the UK market after Persimmon struck an upbeat tone in its results and outlook statement. The company wants to build more houses and the government wants the industry to boost output, so in theory the stars should be aligning. In reality, plenty of people are still finding it hard to get on the housing ladder and interest rates need to be a lot lower to truly provide the tailwind that housebuilders desire.”

Persimmon

“The housebuilding sector has been given a major boost after Persimmon’s 2024 numbers came in ahead of expectations as it returned to growth.

“While the scale of the beat was modest, it comes after a difficult period for the sector and therefore the market is eager to seize on even the smallest morsels of good news. Add in a robust outlook for 2025, backed by a strong order book, and all the foundations were in place for a relief rally.

“Crucially, it doesn’t look like the property market has fallen off a cliff as the end of the current stamp duty holiday looms. This deadline had driven sales in the early part of the year but at worst it seems prices have stalled rather than gone backwards.

“While there are pockets of build cost inflation, Persimmon seems to be managing them for now. The housebuilders may not get back to the golden period when they benefited from cheap mortgages, rising house prices, stable costs and the Help to Buy scheme stoking demand any time soon, but it does look like the background is stabilising.”

Boohoo / Debenhams

“In a surprise move, Boohoo is adopting the Debenhams name as the new corporate brand. This is a significant moment and means the group is now forging a new path.

“Having previously chased the youth fashion market and dipped its toes into other areas through opportunistic investments, Boohoo stumbled amid a backlash against fast fashion and concerns around working practices and its supply chain.

“Beneath the chaos that surrounded the core fashion business, it has managed to take the roots of Debenhams and replant them as an online marketplace. Fortune has favoured the brave and Debenhams has blossomed in its new form.

“Boohoo gave a cheeky hint last November that Debenhams was being brought to the front of the queue after appointing the brand’s boss Dan Finley to become group chief executive. Debenhams has now become the group’s profit driver, so it makes sense to make it the core engine.

“While Debenhams hasn’t operated physical stores since 2021, the brand still resonates with the public. Its death as a physical retailer was down to falling profits and rising debts, together with a structural shift in people buying more goods online. The idea of going to a vast department store on the high street or retail park to buy an array of goods went out of fashion in the modern world, yet the concept is now alive and well online. That’s how Boohoo has managed to resuscitate one of the UK’s best-known shopkeepers.

“Retailers are increasingly going down the multi-brand path to sell goods. Next operates a platform to sell and ship third party goods. Marks & Spencer has gone down a similar road and now sells products from more than 100 third-party brands. It’s all about giving shoppers choice. Rather than have to click through countless websites, you can do everything from one site.

“These developments mean that Debenhams has serious competition and its resurrection is still going to take hard work to sustain momentum.

“The stock market reaction to the news is informative. Boohoo’s share price only nudged up a small amount in early trading, implying some scepticism among investors that the strategic pivot is the answer to the company’s problems.”

Domino’s Pizza

“While Domino’s Pizza has been able to eke out some growth against an uncertain backdrop, importantly it has done so without sacrificing profitability.

“This is of particular note given the pressures on employment-related costs associated with last October’s Budget.

“The challenge for Domino’s is to continue to drive sales in a difficult environment where spending £15 on a pizza could be a hard sell, given supermarkets sell them at a fraction of the price.

“The company needs to make sure it hits the mark in terms of convenience – getting deliveries out to customers hot and on time. It also needs to make sharp but sparing use of deals to attract custom and innovate its menu to cater for shifting tastes.

“Driving repeat sales by signing people up to its recently launched loyalty scheme is another lever the company can pull.

“After enduring a fairly fractious relationship with franchisees, a new long-term agreement provides some stability. But the business must work hard to take advantage of this.”

Facilities by ADF

“Film and TV production facilities provider ADF was unlucky that its IPO came just before a Hollywood writers’ strike put lots of projects in the industry on hold.

“However, any hope this would prove a short-term issue, with a potential boost from pent-up demand once it had concluded, has fast evaporated.

“For several years it was boomtime in the industry as streaming services spent heavily on content to attract eyeballs, but now that spending has been scaled back as the likes of Disney, Netflix and the rest look to make streaming pay.

“The company is trailing better times ahead in the second half of 2025 but investors are unlikely to take much notice and will focus instead on the fact that less than a quarter of the way into the year, profitability and revenue are expected to be materially below expectations.”

These articles are for information purposes only and are not a personal recommendation or advice.