News & Insight • Weekly Newsletters

14 March 2025 | William Buckhurst | Charlie Todd

That Was The Week That Was

MACRO

• Like Dr Dolittle’s Pushmi-Pullyu, President Trump continues to go back and forth on global trade tariffs. After threatening to impose tariffs on EU wine and other alcoholic beverages, Trump announced online that he would go forward on proposals to impose a 200% tariff from the EU if Brussels followed through with taxing American whiskey exports. Trump also stated that he would not repeal tariffs on steel and aluminium or would back off on plans for imposing reciprocal tariffs on global trading partners on 2^nd April
• A potential ceasefire in Ukraine has been mooted in the press with Ukraine prepared to accept US terms. Russian President Putin stated that he wanted to discuss a proposed ceasefire in Ukraine with President Trump but warned that any truce should lead to a long-term resolution to the war. Putin stated that “the idea itself is correct, and we certainly support it, but there are issues that we need to discuss” while Trump noted that “we’re getting word that things are going ok in Russia”
• An indicator of new buyer enquiries for UK housing declined. The February RICS House Price Balance declined from 21% to 11% vs 20% expected, reaching the lowest level since November 2023 as data showed that property surveyors also reported a fall in agreed home sales last month. The report noted that “sales are sluggish with low confidence caused by uncertain political and economic forecasts”

COMPANY NEWS

Consumer facing stocks continue to come under pressure

• Trainline hit the buffers on Thursday, falling 13% after stating that full year net ticket sales increased 12% to £5.91bn vs £5.98bn expected with ticket sales rising slightly below consensus estimates as overall company revenue rose 11% to £442m, broadly in line with forecasts
• Puma fell 20% on Wednesday after reporting full-year results and issuing a cautious outlook. The company stated that it expected full year pretax earnings to be in the range of €520-€600m, which was below expectations. Sales were forecast to grow single digits. Analysts noted that the guidance raised questions as to whether the company could achieve its 2027 margin target, a goal that had already been pushed out two years in January
• Dicks Sporting Goods finished 5.6% lower after reporting in line quarterly results on Tuesday with net sales of $3.89bn above consensus estimates. In similar fashion to other retailers, the company gave cautious guidance stating that it expected full year growth of 1-3% vs 2.6% expected with management announcing a new five-year share buyback plan of up to $3bn
• Inditex, the owner of Zara, finished 7.5% lower on Wednesday after reporting in line results but that sales this year were up 4%, lower than expected, as analysts called out notably soft trading in Asia and the Americas
• HelloFresh went past its sell by date as it closed down 18.5% on Tuesday after reporting results in line with estimates. The company guided to full-year organic revenue declining 5.5% (at the midpoint) compared to 2.7% growth expected as management commented that they would continue to focus on more profitable customers and take a “stricter stance” on marketing spend while extending its cost reduction programme to 2026

TECH WEEK

There have been winners and losers from the AI trade but there is hope yet as previous struggler Intel rose by almost 20% over the week after it was reported that TSMC had pitched to US chip companies about taking a stake in a joint venture that would run Intel’s manufacturing business. Reports indicated that TSMC had outlined the proposal to Nvidia, AMD, Broadcom and Qualcomm around taking stakes in a JV with the proposal outlining that TSMC would run Intel’s foundry operations. The company also announced that Lip-Bu Tan, would become its new CEO.

One company that continues to struggle is Adobe. It fell 14% on Thursday after reporting results that were slightly above consensus estimates with Digital Media and Product better than forecast. The company left guidance unchanged as management commented that they see full year digital media growth of 10% which disappointed.

LUXURY WEEK

All change at the top fashion houses. Gucci (owned by Kering) named controversial Balenciaga designer Demna Gvasalia as their new creative director. He has a lot of work to do – Gucci sales excluding currency movements fell 24% last quarter. Then Versace (part of Capri Holdings) named Dario Vitale, the former design director of Prada SpA’s Miu Miu, to succeed Donatella Versace. Miu Miu, the watch-word in cool-girl style is currently one of the fastest growing luxury brands in the world. Meanwhile, Dior, part of the giant LVMH stable, is widely expected to appoint Loewe’s Jonathan Anderson as its creative director.

Kering shares tumbled 11% on the news of Denma’s appointment. LVMH, still the largest company in Europe, are down around a third from their 2023-highs. Meanwhile, Hermes with its unique business model, exceptional pricing power and a customer base that remains largely resilient to an economic downturn, continue to trade close to all-time highs, but for an eye-watering forward p/e ratio of 50x. Richemont shares are very nearly at all-time highs. And even the UK-listed Burberry is showing signs of life after a very poor run.

THE WEEK IN HISTORY

1933: Franklin D. Roosevelt makes a nationwide speech pleading for cooperation in restoring public confidence in America’s banking sector. What was supposed to be a four-day banking holiday lasted over a week. As Americans began to get restless, FDR’s speech thanked the country for their sacrifice and begged them to continue to remain calm.

2009: The S&P 500 index bottoms out during the Great Financial Crisis at 676.  It has increased almost 8x since.