Latest eurozone retail data released last week has considerably boosted the revenues outlook for a wide array of FTSE stocks. According to Eurostat, sales in the region surged 3.7% in January from the corresponding month in 2014, the fourth consecutive monthly rise and the biggest annual increase since May 2005.
With this in mind I have picked three London-listed lovelies set to benefit from these improved conditions.
The effect of macroeconomic pressure on consumers’ wallets has long been a bugbear for Vodafone (LSE: VOD) (NASDAQ: VOD.US), an issue which, combined with increased regulatory pressure and intense competition, has seen its European divisions drag for some time.
Still, since last summer the mobile operator has noted an uptick at its continental operations, and noted in February’s interims that “strong data demand and a more stable pricing environment” in Europe has helped performance stabilise more recently. Although organic service revenues slipped 2.7% during September-December, this marks a vast improvement from the 5% drop posted during the corresponding 2013 period.
And with Vodafone splashing the cash to expand its operations in Europe, I believe the business is in great shape to enjoy the fruits of rising consumer spending power. Vodafone has made exciting acquisitions in the multi-services sector through the purchase of Kabel Deutschland and Ono, while its $13bn Project Spring organic investment programme is also boosting its data and voice capabilities.
Meanwhile, British fashion house NEXT’s (LSE: NXT) extensive European network should also benefit from improving retail conditions across the single currency bloc.
Not surprisingly the company advised that “turbulence in the international economy present potential downside risks” in its latest update in December. Still, NEXT expects international markets to underpin firms earnings growth in the coming years, and the firm expanded into 11 new territories during the first half of fiscal 2015, including rolling out its online Directory service to euro members Cyprus and Malta.
The business now trades in 72 countries across the globe, from continental heavyweights Germany, France and Italy through to far-flung destinations including China and Brazil.
And in a bid to cotton onto galloping demand from European consumers, NEXT has announced plans to open a local distribution hub in Northern Ireland which will service customers in the province as well as across most of Eire. And the retailer expects to open a second international warehouse — most probably in Eastern Europe — at some point during the next year.
Like the rest of the budget carrier space, easyJet (LSE: EZJ) has benefitted from accelerating demand from business customers and holidaymakers alike. And with Europeans benefitting from an extra little bit of bunce in their pockets, I believe that easyJet and its peers can expect the number of people jetting off to continue rising.
Indeed, latest passenger numbers released this week again confirmed the terrific progress the airline is making in pulling customers onto its flights. The number of travellers climbed 6.5% during the 12 months to February, to 65.6 million, while the load factor rose 1.4% to 90.8%.
Such resplendent customer numbers have encouraged easyJet to steadily increase the number of routes it operates across the continent, and just last month the company announced it was adding new routes to Greece, Tunisia and Croatia. Further additions can be expected as passenger numbers look set to keep trekking northwards.