This week highlighted how quickly sentiment can swing when trading updates surprise in either direction. Retailers were at the centre of the action, one punished for caution and another rewarded for fresh optimism, while fintech ambitions drew focus on the longer game.

Primark stumble knocks ABF

Associated British Foods (ABF) saw its shares gap lower after flagging softer sales at Primark in continental Europe. Like-for-like sales in France and Italy were down about 4% in the second half, offsetting solid progress in the UK and Ireland and standout 23% growth in the US. The mixed picture overshadowed resilience elsewhere in the group, with the market punishing the cautious outlook.

Management has also been busy reshaping the portfolio. The closure of the Vivergo bioethanol plant, restructuring in Spanish sugar, and the planned acquisition of Hovis by Allied Bakeries signal a willingness to take tough decisions. Grocery and Ingredients divisions held up, while Sugar recorded losses close to £40m. For investors, the message is that ABF has the cash flow and balance sheet strength to absorb bumps, but near-term confidence depends on stabilising Primark’s continental performance.

Kingfisher surprises to the upside

In stark contrast, Kingfisher (KGF) delighted the market with half-year results that beat expectations and lifted full-year guidance, sending the shares sharply higher. Reported sales rose to £6.8bn, up 0.9% at constant currency, while adjusted pre-tax profit climbed 10% to £368m. Adjusted EPS jumped 16.5% to 15.3p, underpinned by better margins and tighter cost control.

Strategically, the group is pressing ahead with its “Powered by Kingfisher” plan. Trade sales grew nearly 12% to £1.9bn, e-commerce climbed 11%, and digital innovations like Screwfix Sprint delivery and the Tradepoint app are gaining traction. Market share improved in the UK, France and Spain, underlining that execution is moving in the right direction. For investors, the results mark a turning point: confidence has returned, and if momentum continues, the valuation gap to peers should narrow further.

Wise raises the bar

The big ambition from Wise (WISE) this month is the exploration of a UK banking licence, a strategic shift that would give it more control over customer deposits and payments. Greater regulatory oversight and capital requirements would come with the territory, but the potential benefits in terms of earnings resilience and margin capture are significant.

Medium term, the story becomes more compelling. A successful licence would broaden Wise’s product set, enhance the quality of cash flow and deepen its competitive moat. The market will now watch closely for updates on application progress and capital planning.