Frasers turns its back on Mulberry pursuit, Watches of Switzerland faces US listing pressure from activist, Coca-Cola sales volumes drop and Boeing awaits crucial vote on pay

“With so little between the two US presidential hopefuls it’s no surprise that this earnings season isn’t being met with the same sense of joie de vivre as the one in the summer,” says Danni Hewson, AJ Bell Head of Financial Analysis.

“Markets don’t like unpredictability and the US election will have huge global ramifications, so a little caution is understandable.”

Frasers / Mulberry

“A bit like trying to secure a date with the object of your affection, if you’re consistently rebuffed you’ve probably been relegated to the friend-zone.

“When it comes to Frasers Group and Mulberry it might be more a case of ‘frenemies’. After weeks of knocking on an unresponsive boardroom door Mike Ashley’s retail behemoth has decided it can put its money to better use elsewhere. But the Sports Direct owner will retain its chunky stake in Mulberry and hopes it might at least get a peck on the cheek the next time the board of the luxury goods maker gets around the decision-making table.

“Whilst Frasers Group has certainly got the chops to take an ailing brand like Mulberry to new heights, Mulberry very clearly wants to set its own cruising altitude. Though Mulberry’s shares slipped on the news that Frasers won’t dig any deeper, so it seems many investors will want the company to show its strategic hand quickly.

“With another of Frasers’ previous targets, Debenhams, now potentially in play thanks to Boohoo’s recent rejig it’s only reasonable to assume speculation will mount that the retailer might want to have another go at making that high street darling into an online success.”

Watches of Switzerland

“Luxury goods makers and European markets have been a tried and tested match for decades, so it says something significant when an activist investor is pushing for one of its ilk to up sticks and chase more substantial valuations over on Wall Street.

“Watches of Switzerland’s share price has had a particularly bad run this year, down 40% since the start of 2024. The weakness of the Chinese consumer, the cost-of-living crisis which has closed many a potential open wallet and the so-called tourist tax which subdued London trading have all played their part.

“Looking at the difference in performance between London’s blue-chip FTSE 100 and the S&P 500 since the start of the year, 7% versus 22% respective growth seems on the surface to present a huge opportunity. But Watches of Switzerland sits snugly on the FTSE 250 and could get lost in the hodgepodge of smaller companies that nestle within the Russell Index. Gatemore Capital Management might feel a shift would ‘unlock benefit’ but if it gets its way there’s a chance it could become a case of be careful what you wish for.”

Coca-Cola

“Coca-Cola has shown some pretty fancy footwork to persuade drinkers to keep shelling out premium prices for its products despite ongoing consumer caution, especially in the US. Average selling prices have jumped up a further 10% over the last quarter but there has been a cost to the business, with sales volumes falling for the first time in two years.

“The team have doubled down on delivering the right product in the right places to the right people and they’ve offered smaller sized options for those wanting to indulge but still watch their budgets.

“Smart product placement, like those gold water bottles at the Paris Olympics, has reinforced the message that Coke’s brands are enjoyed by the best, suggesting both subliminally and straightforwardly that they are the best.

“Developing new versions of existing beverages that appeal to certain markets and creating brands that strike a chord with drinkers in those markets have also helped them expand their customer base globally.

“But the company hasn’t pulled any punches when it comes to what chair and CEO, James Quincey, soft-pedals as a ‘dynamic external environment’ and whilst the focus on long-term growth is admirable, investors have been disappointed that rising prices haven’t resulted in an increased profit outlook for the full year. Things are tough, and consumers have become ever more picky.”

Boeing

“There are six billion reasons Boeing’s relatively new CEO will be hoping the vote on the plane maker’s latest pay deal goes his way. Investors knew the strike was crippling the company but seeing the numbers laid out in black and white today felt positively grim.

“This is a business that should have managed to get the wind back beneath its wings by now, putting the last few difficult years behind it and supplying stalwart customers with the planes they need.

“Instead, Boeing is still fighting to find a way back from the brink and no-one can hear the term ‘rightsizing’ from Kelly Ortberg without seeing it as anything less than big cuts.

“An end to the strike would at least stop the financial bloodletting but an increased wage bill will also add to the weight on a business which needs the goodwill of investors, employees and customers alike if it’s going to emerge from its troubles in half-decent shape.”

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