The Week Ahed: Updates due from John Lewis, Next, Kingfisher, Morrisons and Thonrtons
The recovery in consumer confidence is expected to be reflected in results from a number of major retail players this week.
Supermarket group Morrisons will update on its roll out of M-Local convenience stores on Thursday as it attempts to halt sliding market share and falling sales.
Under intense pressure from discount rivals and squeezed household budgets, Morrisons saw like-for-like sales fall 1.8% in the three months to May 5.
It is playing catch-up with its bigger rivals on opening convenience stores, and hopes to be trading from 100 of the smaller outlets by the end of the year.
Analysts on average expect pre-tax profits for the six months to the start of August to slide 13% to £383million from £440mn a year earlier, with underlying profits falling 8% to £410m.
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John Lewis is set to post more strong growth on Thursday as its department stores and Waitrose supermarkets thrive on a recovering retail picture.
The employee-owned group, which trades from almost 40 department stores and around 300 Waitrose outlets, has grown throughout the downturn despite stretched household budgets and multiple retail failures.
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Retail analyst Nick Bubb expects the group to post a rise in underlying pre-tax profits of around 6% to £117m in the six months to the end of July.
First-half results from B&Q owner Kingfisher will be closely watched for signs of a lift from Britain’s recovering housing market when they are released on Wednesday.
Warmer weather after the snow-hit start to the year has already given the retailer a boost in recent months, as Britain’s heatwave drove demand for barbecues and garden furniture.
Analysts on average expect the retailer to post adjusted pre-tax profits of £365m for the six months to the start of August, down about 2% on £371m a year earlier.
The summer heatwave and recovering household spending are expected to help Next report buoyant recent trading after the freezing start to the year.
The retail giant has enjoyed a weather boost in recent months and could also cite firming consumer confidence when it posts first-half results on Thursday.
Analysts at Numis Securities expect pre-tax profits to grow to £271m from £251m a year earlier.
Newcastle United owner Mike Ashley’s retail group Sports Direct International will update on recent trading on Wednesday after a record year that looks set to earn the group promotion into the FTSE 100 index.
The SportsWorld owner reported a 40% leap in pre-tax profits to £207.2m for the year to April 28, while underlying earnings jumped 22.1% higher to £287.9m. Despite that solid performance and expectations for first quarter trading to show further sales growth, the City will be keen for further details on plans for a possible bonus scheme for Mr Ashley.
In July, Sports Direct said it had decided to scrap plans to resurrect the contentious “super-stretch” bonus plan for its founder and would review “various options”, although no notice has been put to shareholders ahead of the AGM in a sign that discussions are still ongoing.
Surging sales of chocolates at supermarkets will help Thorntons ring up a sharp recovery in profits when it reports annual results on Wednesday.
Analysts at Investec Securities expect the group to post underlying pre-tax profits of £5.2m for the year, a sharp recovery from profits of just £851,000 a year earlier, with sales through supermarkets having increased 11.8% in the 10 weeks to June 29 while sales through is own high street stores also edged ahead by 0.5%.