Why Home Retail, Mulberry, and WH Smith Should Lag the FTSE 100 Today


LONDON -- Yesterday's pause in the FTSE 100's recent slide didn't last long, and the U.K.'s major index has fallen another 80 points by 8:25 a.m. EDT today to 6,251.

It seems like only yesterday that pundits were wondering when we'd see the FTSE break the 7,000 level, but it's looking more likely to fall back through 6,000 at this rate.

But which individual shares are leading the market down? Here are three names that are underperforming and look set to lag the FTSE today.

Home Retail
Home Retail shares have been on a strong recovery since last summer, but they took a knock today after a quarterly update told us the company's Homebase DIY chain had been adversely affected by the variable weather. Although sales rose 0.2%, with like-for-likes up 1.4%, the performance was a little behind expectations.

The group's Argos chain had a better quarter, with total sales up 1.2% and like-for-like sales up 1.9% -- and that's after shop closures had reduced sales by 0.7%.

Following the update, Home Retail's shares dropped 9.4% to 130.5 pence -- but they're still up about 85% over the past 12 months.

The market was disappointed by annual results from Mulberry Group this morning, sending the share price down 1.4% to 935 pence. However, the figures were mostly bang in line with the guidance posted on March 22: Revenue was down 2% to £165 million, and pre-tax profit dropped 28% to £26 million.

But basic earnings per share, at 32.2 pence, came in slightly below market expectations, and the full-year dividend of 5 pence per share was about a penny less than forecast. The Mulberry share price is now down more than 50% over the past 12 months.

WH Smith
WH Smith shares have fallen 2.2% on the release of a third-quarter update. Total sales fell 5% compared with the same period last year, with like-for-like sales down 6%.

But we were told that WH Smith's financial position was "in line with market expectations" and that the firm's share buyback program was going well, with 5 million shares purchased and £34 million returned to shareholders. Overall, the share price has been going strongly: Even after recent falls, it's up more than 50% over the past 12 months.

Finally, reliable dividends can more than compensate for the day-to-day ups and downs of share prices. So how about a company that's offering a 5% yield and could be set for some nice share-price appreciation, too? It's the subject of our brand-new report "The Motley Fool's Top Income Share For 2013," which you can get completely free of charge -- but it will be available for a limited period only, so click here to get your copy today.

The article Why Home Retail, Mulberry, and WH Smith Should Lag the FTSE 100 Today originally appeared on Fool.com.

Alan Oscroft has no position in any stocks mentioned. The Motley Fool recommends WH Smith. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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