3 FTSE 100 stocks I’m watching in September

Despite the odd wobble along the way, the FTSE 100 is now up 19% in the last 12 months. Naturally, some of its constituents have done far better. Can this continue in September when results fly in thick and fast though? Here are three companies I’ll be keeping an eye on. 

JD Sports

Having climbed 41% over the last year, shares in sportswear retailer JD Sports (LSE: JD) are now well above their pre-Covid levels. It’s easy to see why. 

Back in July, the company said it had seen good post-lockdown trading. Business was particularly healthy in the US. As such, JD felt comfortable raising guidance on full-year pre-tax profit to “no less than £550m” from £475m-£500m previously. This would represent a 31% increase on that logged for 2020/21. 

Valuation-wise, JD shares trade on 26 times earnings. That’s lower than other shares in the FTSE 100. However, I don’t think it can even be described as cheap, particularly as margins in this business are very average. Overseas sales may also suffer if Covid-19 infections begin rising again. The possibility of brands such as Nike and Adidas trying to lure shoppers to their own sites is another threat.

Interim numbers arrive on 14 September. As good a company JD is, I’ll be watching next month rather than buying. 

Kingfisher

B&Q owner Kingfisher (LSE: KGF) reports half-year figures on 21 September. Unless something has gone seriously awry, these should be very robust. After all, UK lockdowns, a shift in working patterns, and a white-hot house market have all played into the company’s hands.  

A couple of months ago, KGF reported that it continued to see high levels and demand from new and existing customers. As a result, like-for-like sales growth for the first six months of the financial year would now be 22%, rather than “mid-to-high teens.“

Adjusted pre-tax profit would also be in the range of £645m-£660m — a healthy increase from the £580m-£600m previously predicted.  

The question however, is how long will the home improvement boom persist. Having spent so much time inside, I wonder if people will now be more concerned with going on holiday rather than taking on fresh DIY jobs. The arrival of colder weather could also put (external) projects on ice. Factor in tough comparatives and I’m wary of buying now.

Next

Retailer Next (LSE: NXT) is a final FTSE 100 stock I’ll be watching (but not buying) in September. Like the others, shares in the clothing and homewares top-tier titan have done well in the past year. A gain of 31% certainly isn’t to be sniffed at, especially as this still comfortably beats the index.

There’s little doubt in my mind that Next is a quality business. Last year aside, it’s long generated strong returns on capital and high margins. Led by Simon Wolfson, the management team is also top drawer.

Again however, the likely switch to ‘experience’ spending leads me to think that the Next share price may have peaked. Indeed, brokerage Credit Suisse recently said that it expects clothing sales to lag the more general retail revival in the rest of 2021.

Since I already have exposure to the clothing market via a certain AIM-listed giant, Next shares aren’t for me right now. However, I will certainly be scrutinising those half-year numbers when they hit the market on 29 September.