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Covid-hit UK hotels unlikely to recover for four years, says PwC | Business

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The UK hotel industry could take four years to return to 2019 levels of business, even if an effective vaccine helps the sector to recover from the deep financial hit caused by Covid 19.

The daily revenue per hotel room – a key indicator for the sector – is not expected to revive to 2019 levels until 2024 in London, and 2023 across the rest of the UK, according to forecasts published on Tuesday by the accounting firm PricewaterhouseCoopers (PwC).

Renewed lockdowns, the decline in foreign tourist numbers and the near disappearance of business travel have left hotels struggling to attract customers, with a dramatic effect on their earnings.

The fall in corporate demand as well as the absence of big live sport or music events meant big city hotels were suffering the most, while missing out on the increase in Britons staying in the UK for their holidays.

Hotel rooms are expected to be occupied for an average of 45% of the time during 2021. While that would represent an improvement on the rate of between a third and two-fifths in 2020, PwC said the industry was still facing an unprecedentedly bleak outlook.

London hotels will be particularly badly hit. Daily revenues per room in the capital have slumped to only £29 in 2020, less than a quarter of the £129 achieved in 2019, PwC said – by far the biggest hit the industry has seen in comparable data dating to the 1970s.


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Texas hospitals prepare to administer Covid vaccine shots in less than three weeks

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Nordstrom shares rise as retailer’s earnings top estimates

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Pedestrians pass in front of a Nordstrom Inc. store in the Midtown neighborhood of New York, on March 20, 2020.

Gabby Jones | Bloomberg | Getty Images

Nordstrom shares got a lift Tuesday after the department store reported that its third-quarter sales picked up more than analysts had anticipated, suggesting it might have a stronger holiday season than some investors expected if trends continue.

Nordstrom shares were up more than 4% in extended trading Tuesday.

Nordstrom CEO Erik Nordstrom said the retailer has made strides with its online business, especially since its stores were temporarily shuttered. Digital sales in the three-month period were $1.6 billion and represented 54% of the retailer’s business.

He said the company is “continuing to amplify categories that are relevant with customers during the pandemic, such as activewear and wellness products. Yet he said it’s also looking toward the future with the Covid-19 vaccine and anticipates “pent-up customer demand, particularly around occasions like travel or in-person social events.”

He said the retailer’s off-price store, Nordstrom Rack, could be a major growth driver because it’s one of the few in this category with a large online presence. The company will expand its inventory, particularly at the lower price point, he said.

Here’s how the company did in the fiscal third quarter ended October 31, compared to what analysts were expecting, based on Refinitiv data:

  • Earnings per share: 34 cents vs. a loss of 6 cents expected
  • Revenue: $3.09 billion vs. $3.10 billion expected

Nordstrom said its net income fell to $53 million, or 34 cents per share, from $126 million, or 81 cents per share, a year earlier. Analysts surveyed by Refinitiv on average had expected the company to post a loss of 6 cents per share.

Total revenue for the company fell to $3.09 billion from $3.67 billion a year ago, and was lower than the $3.10 billion that analysts were expecting.

Nordstrom was among the retailers that were forced to close their doors in the early days of the coronavirus pandemic. Total sales were down 40% in the first quarter and 53% in the second quarter compared with the same period a year earlier.

In the third quarter, total sales were down only 16%. That includes an approximately 10-percentage point impact from the Anniversary Sale.

“Our Anniversary Sale serves as a strong proof point in our ability to amplify relevant categories, brands and trends to meet shifting customer preferences,” Chief Financial Officer Anne Bramman said during a conference call.

During the quarter, the company said its top performing merchandise categories were activewear, home, beauty and designer.

On the conference call, Bramman said the company expects sales to decrease in the low 20-percentage range in the fourth quarter. But the company expects to deliver positive operating cash flow, she said.

Yet she acknowledged the outlook is uncertain because of the pandemic and said that its expectations are based on stores remaining open.

Read the full earnings release here.


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Gap, Nordstrom, Dell Technologies & more

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Check out the companies making headlines after hours on Tuesday:

HP Inc. — Shares of the computer hardware builder jumped more than 7% in after-hours trading on the back of stronger-than-expected quarterly results. HP Inc. posted earnings of 62 cents per share on revenue of $15.26 billion. Analysts expected a profit of 52 cents per share on revenue of $14.72 billion, according to Refinitiv. The company also issued better-than-expected earnings guidance for its fiscal first quarter.

Gap — Gap reported disappointing quarterly earnings after the bell, sending the retailer’s stock down more than 6%. The company earned 25 cents per share in the previous quarter, while analysts polled by Refinitiv had forecast a profit of 32 cents per share.

Nordstrom — Nordstrom shares gained 4.4% even after the company posted a disappointing revenue number for the third quarter. Nordstrom said its revenue for the quarter came in at $3.09 billion, just shy of a Refinitiv estimate of $3.1 billion. Nordstrom also reported earnings per share of 34 cents, but CNBC could not determine if that number was comparable to a Refinitiv forecast.

Dell Technologies — Dell Technologies reported third-quarter earnings and revenue figures that topped analyst expectations, sending the computer builder’s stock up nearly 2%. Dell earned $2.03 per share on revenue of $23.48 billion. Analysts had forecast earnings per share of $1.40 on revenue of $21.85 billion, according to Refinitiv. The company also posted sales for its subscription and “software as a service (SaaS)” that surpassed estimates.

American Eagle Outfitters — American Eagle Outfitters saw its stock fall more than 3% on the back of mixed third-quarter results. The retailer earned 35 cents per share, topping a forecast of 34 cents per share. Revenue for the company came in at $1.03 billion, in line with expectations.


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